Financial Daily from THE HINDU group of publications
Sunday, May 23, 2004
Financial Daily from THE HINDU group of publications Sunday, May 23, 2004 |
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Agri-Biz & Commodities
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Gold & Silver Gold bullion securities begin to attract investor attention G. Chandrashekhar
Mumbai , May 22 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.
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