The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site. Please see our Subscription Terms and Conditions.


All material subject to strictly enforced copyright laws. © 2022 Euromoney, a part of the Euromoney Institutional Investor PLC.
CAPITAL MARKETS

Property derivatives: Light at the end of the tunnel

Slight pick-up in volumes; Investors see value in battered UK

Combining as it does real estate risk and derivative risk, the property derivatives market has not surprisingly had a tough time of late. In the first quarter of 2007 business was booming, with £2.9 billion of trades. But times have changed. Global volumes were £708 million for the second quarter this year – a modest rise from £606 million for the first quarter. A total of 159 trades were executed with an average outstanding size of £7 million.

The UK makes up the lion’s share of the market, accounting for £554 million of the total in the first quarter and £606 million in the second. In France, trading volumes increased, but the German market (for which there are difficulties with the index valuation) came to a standstill after just one trade in the first quarter of the year.

"The market has been very quiet," says Jon Masters, head of property derivatives at BGC Partners in London. "Activity in the first quarter of this year was the lowest it has been for two to three years." But he is optimistic that there are signs of a change in sentiment. "The pick-up has been very gradual and very tentative.

You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.

SUBSCRIBE ONLINE TODAY

Unlimited access to Euromoney.com and Asiamoney.com

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually

FREE 7 DAY TRIAL

Unlimited access to Euromoney.com and Asiamoney.com, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors

LOGIN NOW

Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree