hong-kong-pioneers-property-derivatives-in-asia

Hong Kong pioneers property derivatives in Asia

A landmark property derivative trade between ABN AMRO and Sun Hung Kai could open the door on a market worth billions of dollars.
February 27, 2007
ABN AMRO Bank and Sun Hung Kai Financial have traded AsiaÆs first property derivative. The transaction, brokered by GFI Colliers, is based on the University of Hong Kong Real Estate Index Series and is the first deal of its kind anywhere in Asia.

It is a one-year trade in which ABN AMRO receives a coupon based on the returns of the index and, in return, pays Sun Hung Kai Financial a spread over Hibor. The exact details of the transaction have not been made public, except that the value is below HK$100 million.

However, in this instance, the devil is not in the detail. ABN AMRO and Sun Hung Kai have kick-started a market...
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