International finance group Investec will offer warrants on five of the most liquid shares traded on the Irish stock market.

The covered warrants are like options, giving investors the right to buy or sell the shares at a predetermined price up to a specific date.They will be offered on AIB, Anglo Irish Bank, Bank of Ireland, CRH and Ryanair with trading due to start from mid-October.

Investec, which has been an active player in the equity warrant market in Johannesburg since 1997, is the first financial institution approved by the Irish Stock Exchange to offer such derivative products in the Irish market.

"Down the line, as the product becomes more recognised by investors, we will be looking at issuing warrants on other Irish stocks and non-Irish stocks," said Mr Declan Maher of Investec's Irish equity warrant desk.

The warrants, which will be traded as listed securities on the Irish Stock Exchange, will be available to private and institutional investors through local stockbrokers.

They will allow Irish investors to hedge their share portfolios by means of put warrants, which give them the right to sell. Those who wish to increase their exposure to certain stocks can purchase call warrants, giving them the right to buy at a fixed price by a certain date.

Mr Brian Healy, director of trading and regulation at the Irish Stock Exchange, welcomed the introduction of the new product.

"It is a first for the exchange and a new type of instrument. It is the first entry into the market for derivatives products," he said.

He noted that, in markets such as Australia and South Africa, the number of deals was boosted by 15 to 20 per cent by the warrant market.

Initially, the warrants are likely to be targeted at institutional investors and the sophisticated private investor.