Macquarie launches Singapore’s first Investment Warrants

Singapore – 8 January 2008: Macquarie announced today the launch of Investment Warrants, a product first in Singapore, which allow investors to enhance their exposure to the Singapore stock market by partially paying for shares listed on the Singapore Exchange (SGX).

Different from conventional trading warrants currently traded on SGX, which typically have a contract expiry of three to six months, Investment Warrants have a longer contract expiry date of one year or more, lower holding costs and a lower risk profile.

Investment Warrants allow investors to buy shares in two payments – one now for a fraction of the share price, and one in the future. While having paid the fractional amount for the right to purchase the underlying shares, investors are entitled to payments equivalent to 100 per cent of the ordinary dividends, which can help to accelerate their wealth and reach their investment objectives sooner.

Mr Barnaby Matthews, Head of Warrants at Macquarie Securities in Singapore, said Macquarie was excited to be the first in Singapore to launch Investment Warrants.

“We are very proud to be the first issuer in Singapore of Investment Warrants,” Mr Matthews said. “We have received a lot of interest from Singapore investors looking for a longer term, lower risk alternative to traditional trading warrants. We believe that this product will be in demand from investors who currently invest directly into shares or use margin finance, rather than from the existing structured warrant investors.”

“Share investors can earn greater potential returns since the price of an Investment Warrant generally moves in line with the underlying share however, because warrants are only a fraction of the price of the underlying share, they tend to move in greater percentages than the share price.”

“Besides having the option to exercise and take delivery of the fully paid shares at expiry, investors are able to increase their exposure to shares without the risk of margin calls, and stand to enjoy gains on capital appreciation and dividend equivalent payments.”

Mr Thomas Tey, SGX Senior Vice President and Head of Product Management and Institutions, said, “We are excited to work with Macquarie to introduce Investment Warrants on SGX. Such warrants allow investors to maximise returns by using a prudent amount of medium-term leverage to participate in Singapore’s blue chip stocks, while benefiting from the full ordinary dividends of the underlying stock. The listing of Investment Warrants not only adds to the spectrum of warrant products available to our investors, but also strengthens our strategy to build a vibrant and robust structured products market in Singapore.”

The first batch of five Macquarie Investment Warrants with a contract expiry of one year or more, will be available over some of Singapore’s major blue-chip stocks such as CapitaLand, DBS, Keppel Corp, and SingTel, and will start trading on SGX on 9 January 2007. Investors can choose to buy and sell anytime using their normal trading account, just like shares.

Macquarie has been committed to making the warrants market more accessible to retail investors since it entered the local market more than two years ago.  Currently the largest issuer in Singapore by both value and volume of warrants traded, Macquarie was responsible for 32 per cent of the warrants traded on SGX for the year ending 31 December 2007. By way of comparison, Macquarie’s next closest competitor had only 22 per cent.

“We attribute this to investors' confidence in the pricing of our warrants and the quality of our warrant markets,” said Mr Matthews.

Mr Matthews will be hosting an afternoon tea briefing for the media at 3pm, Tuesday, 8 January 2008, at Macquarie's office, 23 Church Street, level 11, Capital Square to walk through the features, benefits, and target audience of this latest product to be listed on SGX. Please contact Ms Ong Chung Ching at chungching.ong@macquarie.com or 6231 2748 to confirm your attendance or for any other queries.

About Macquarie Securities (Singapore) Pte Limited (MSSPL)

Macquarie Securities commenced operations in Singapore in December 2004 and is today the biggest issuer of warrants by market share in Singapore. It has about 140 warrants trading on Singapore Exchange (SGX) over both Singapore and Hong Kong listed shares as of 31 December 2007. The team in Singapore acts as the market-maker for these warrants and arranges over-the-counter derivative transactions between Macquarie and Singapore-based counterparties, including Singapore domiciled private/consumer banks and insurance companies.

Macquarie Securities has also taken a lead in educating retail investors about the warrants market by running a series of investment seminars in conjunction with SGX. Macquarie also offers equity-structured products to Singapore based private banks and securities companies.

For further information, please contact:

Media Enquiries
Kathryn Hanes

Corporate Communications, Singapore
Tel: (65) 6231 2827
Email: kathryn.hanes@macquarie.com