FUTURES Premium slashed
The premium over the physical in the Barclays share price index futures contract (BSI) again fell sharply yesterday to just 2 points. Two sessions ago it was at 36 points and on Tuesday it was at 20 points. Mr Mark Thiele, a dealer for Egden Wignall and Company Futures, said that there was still confusion in the market about the effect of the Magnum special dividend of 25c.
Some dealers were maintaining that the dividend
should have no effect at all, but they were wrong. Calculations had shown that the dividend was worth between 20 points and 25 points come the ex dividend date of June 7, he said. This confusion was being translated into just what the premium should be, he said. The BSI contract gapped down 22 points after the Dow Jones lost 18 points on Wall Street overnight, but came back in early trading. However, the market drifted off again and deepened as Australia turned weaker.
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Press, 1 June 1989, Page 46
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162FUTURES Premium slashed Press, 1 June 1989, Page 46
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