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Gold bullion securities begin to attract investor attention |
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Saturday, May 22 2004 @ 11:43 AM EDT
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 G. Chandrashekhar
Following the relaunch of the Gold Bullion Securities (GBS) on the London Stock Exchange (LSE) purportedly to enable more institutional funds to invest in the product, the assets under management have doubled to $648 million (52.77 tonnes in trust).
According to the company, Gold Bullion Securities Ltd, the average trading of $15 million compares favourably with other exchange traded funds on the LSE.
Gold Bullion Security comprises a secured note of nominal value issued by the company, which carries with it an entitlement to gold bullion held on trust. It is the first of its kind and the first time a commodity-linked product has been launched on a major stock exchange.
Clarifying the difference between the original GBS and the new product, the company said the old GBS was a note of nominal value plus a beneficial interest in a trust, which holds the gold.
The new product is a note, which secures an interest in gold held by the company.
Other than that, all the other features are the same.
GBS, securitised and 100 per cent gold-backed products traded on the LSE are initiatives of the World Gold Council. The purpose of GBS is to establish a global platform that gives investors a secure and cost effective way of buying, holding and selling gold-backed securities.
As interest in the original GBS grew, it became clear that the `direct interest' features of the product meant that some funds (collective investment schemes such as unit trusts and collective funds) could not invest in it.
"We have therefore tweaked the product to enable these funds to invest,'' a spokesperson commented adding that the new structure had broadened the appeal to a wider range of investors and had further increased the potential client base. - Business Line
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| Authored by: Anonymous on Saturday, May 22 2004 @ 06:49 PM EDT |
Gold move is CBOT's third metal attempt
Jeremy Grant and Kevin Morrison
The Chicago Board of Trade's attempt to challenge the New York Stock Exchange's grip on the world's gold and silver futures is not the Chicago exchange's first foray into such metals. In the late 1970s, the CBOT believed it could take on Comex - the metals exchange now owned by Nymex - and launched its own gold and silver contracts. The effort fizzled out as the CBOT failed to wrest liquidity away from the incumbent. Then, in the 1990s, the CBOT attempted an outright purchase of Comex, but saw the exchange go to Nymex.
Whether the CBOT's third attempt will be successful depends on whether it is possible to prise liquidity from an incumbent in any futures market.
So far, the failure of Eurex US to make more than a dent in the CBOT's US Treasury futures products indicates that it remains as difficult as ever.
But there are similarities between the CBOT's Nymex plan and the one precedent for success: in 1998, Eurex's all-electronic system stole the German bund contract away from Liffe's trading pits in London. The CBOT plans to offer electronically traded, standard-sized gold and silver contracts, in competition with Nymex's overwhelmingly "open outcry" traded versions.
Rest of the article.
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