Goldman Sachs trades Irish warrants on London market

Goldman Sachs has started trading warrants in Irish shares on the London Stock Exchange. The US investment house introduced a series of products last Friday based on a basket of Irish shares.

The basket, which includes AIB, Anglo Irish Bank, Bank of Ireland, CRH, Irish Life & Permanent and Ryanair, is intended to broadly reflect the Irish market. Between them, the stocks account for two-thirds of the market and are among the most liquid stocks listed on the Dublin exchange.

Goldman Sachs is offering two put and two call warrants on the basket. These are leveraged products allowing investors to take a punt on the future direction of the market without actually buying each of the six shares.

It is also offering a certificate, a product akin to a tracker, which is aimed at more cautious investors.

Each warrant or certificate is priced at €10 with the six stocks having equal weighting at the outset. Goldman Sachs expects that the decision to price and trade the warrants and certificate in euros will attract Irish buyers, especially as no stamp duty is payable.

Goldman Sachs director Mr Mark Valentine said it was increasingly looking to introduce basket products such as these to allow investors leveraged access to shares that were not available elsewhere. It has recently introduced a similar product for the EU accession states and previously introduced basket products on gold and the property market.

"This is a starting point and we'll see how it goes," said Mr Valentine. "If there is a good take-up, there may be opportunities to customise."

There is a small covered warrant market in Dublin but it deals only in individual stocks and, to date, only one company, Investec, has offered products.