Posts tagged 'warrants'

Re-evaluating cancelled warrants

There was a time when the metals industry could look upon cancelled London Metal Exchange warrants as a sign that demand for physical metal was rising.

The cancellation of the warrant, after all, meant someone was ready to take delivery of the metal in question, taking it out of storage for sale into the real physical market. Read more

The curious case of un-cancelled warrants

FT Alphaville noted a couple of weeks ago how backlogs at London Metal Exchange (LME) warehouses in Detroit were seeing some market participants have to wait up to 10 months to receive their aluminium.

We also noted that an independent study into the LME’s warehousing network had recommended upping load-out rates, to try and deal with some of these issues. Read more

Goldman Sachs makes an expensive typo

The following is the formula for a properly structured warrant tied to Japan’s Nikkei index — which would (we presume) be easy enough to hedge for its issuer:

(Closing Level – Strike Level) x Index Currency Amount / Exchange Rate. Read more

Irish GNP warrants, FTW

It’s not every day that one sees the Irish central bank governor effectively proposing Ireland restructure its debt, but that’s the comment pages of the FT for you.

From the pen of Patrick Honohan on Wednesday, a piece which worries about getting investors to return to Ireland’s very weak growth prospects, cuts, deleveraging, etc… Read more

Don’t fight China, upgrade it, says JPM

The dash for trash has led JP Morgan’s emerging markets team to … China.

Seriously. The JPM analysts, led by Adrian Mowat, are upgrading China from underweight to neutral (for the first time since September 17, 2009) because “China is a laggard market with building momentum” and “these are powerful characteristics in today’s ‘bubble on, bubble off’ markets.” No kidding. Read more

US reaps $4bn on warrant sales

The US government made a gross profit of $4bn on the sale of warrants in banks, with groups led by Goldman Sachs paying over the market rate to leave the government scheme. A Treasury report issued on Wednesday shows that Goldman, unlike other banks, paid more than the upper range of government estimates  when it repurchased the warrants for $1.1bn last June – the biggest individual payment and almost double its first $600m bid. Morgan Stanley, which paid $950m to repurchase its warrants, paid more than the average estimate but within the upper range of valuations.