From: gmail@jeremydonaldson.com
Newsgroups: uk.finance
Subject: SG05 Nikkei 225 index tracking warrant
Date: 13 Jan 2006 02:44:50 -0800
   posting-account=znJbaQ0AAAC8VFhlVEbOsTXcvBz_No9D

Hi

Sentiment has it that Japan is finally on the road to recovery and the
Nikkei 225 certainly seems to be heading consistently North. I read in
Investor's Chronicle last week that a great way to get exposure to the
potential upside of the Nikkei 225 is SocGen's Nikkei 225 Tracker
Warrant (ticker uk:SG05), which is a structured product that is
designed to achieve the following: -

- Delivers 200% of any upside in the Nikkei 225 index (provided you
hold on to the Warrant until it expires at the end of 2007) - thanks to
leveraging
- Only suffers 100% of any downside (just like a regular tracker fund)
- Eliminates exchange-rate risk through appropriate hedging.
- Can be bought and sold on the LSE at any time like any share (so your
money isn't necessarily locked in until 2007)

True enough it is growing like billy-o (it's up around =A31400/warrant,
from =A31000 at launch last October) but the question I have is this
(not being that au-fait with warrants):

Although the potential downside is quoted as 100% of any drop in the
index, while the upside (due to leveraging) is quoted at 200%, does
that only apply if you bought in at the launch, when the price was
=A31000? In other words, if you buy in now, at =A31400, is there a
potential 200% of loss downside, back down to the launch price of
=A31000, before reverting to 100% as per the product spec?

Just trying to work out the risks here.

Any input appreciated.

Many thanks
Jeremy