Market Watch

SG powers up with 37 new warrants

Société Générale’s investment banking arm SG has backed up its confidence in the future of the fledgling UK covered warrant market by issuing 37 new warrants. David Lake, SG’s director of UK warrants, said the instruments were ideal in volatile markets. They maximise returns – “small bounces on the up side can lead to five or 10 times the return you would get from a straight equity investment in the same stock” – and minimise losses by protecting investors from direct exposure to stocks. Mr Lake claimed UK volumes would leap from their current level of just 100-150 daily trades to Italian levels of 10,000 within two years. SG’s new warrants are based on nine underlying stocks and indices, including the FTSE 100, Dow Jones Index, Prudential and Anglo American on the London Stock Exchange. Advisers lobby for independence in Spain Spain’s “financial agents” have launched a campaign for the freedom to sell the products of all fund managers on an independent basis. Currently, they can recommend investment products, but are not allowed to distribute them unless they are tied to a bank or stock broking firm. This means they can only effectively distribute products offered by that institution. A group of advisers has formed the Asociación Nacional de Agentes Financieros (ANAF) to lobby the government for the right to recommend and supply access to investment products offered by a range of financial institutions. A close watcher of the Spanish market and analyst at research company Cerulli, David Romani, said ANAF had a strong case and the government was likely to come round. However, he said it could be between six months and six years before an independent financial advice channel began to flourish. The ANAF will present a blueprint for new legislation to the government before spring. It will call for an academic or professional qualification for financial advisers, government regulation and asset-based fees.