INVESTORS' ATTENTION ARRESTED BY WARRANTS
Every time interest rates drop a point on their steady downward
slide, a band of European retail investors feel a little more smug. They
have good reason to be, as they are out-performing even the most
successful of professional fund managers. That's because they are
holding debt warrants.
"They have a price performance that knocks your socks
off," exclaimed one. "They really make a nonsense of putting
your money into equities or bonds." Typically, a freshly issued
debt warrant purchased in January 1986 had more than doubled its value
by March. Those lucky enough to have bought new issues last summer have
watched their investments rise 400%.
The tipsters have been eager to spread the word among their
investor flock and lead managers have been equally busy persuading
borrowers to issue. With the feeling that interest rates still have
some way to fall, the breeze...
