NEW YORK, May 5 (Reuters) - MacroMarkets LLC has delayed the launch of the first financial instruments through which investors can bet on home prices, citing surprisingly strong demand.
The decision was made on Tuesday afternoon to keep selling shares in the products until next week because there was more interest than the company could satisfy, Chief Executive Sam Masucci told Reuters.
MacroMarkets will determine a revised trading date for the shares once it decides to stop selling them.
The instruments are a linked pair of exchange-traded trusts pegged to the Standard & Poor's/Case-Shiller index measuring home prices in 10 major U.S. cities.
'The index is representative of about 30 percent of the housing market,' Masucci said. 'That's equivalent to a portfolio of about 25 million homes.'
Housing bulls buy shares in the 'up' trust while bears invest in the 'down' trust. If the index moves down, a portion of the up shares' value will shift to the down trust and prices will move accordingly.
MacroMarkets had planned to close pricing on the shares, conducted through an initial-public-offering auction process, on Tuesday. They were scheduled to start trading on the NYSE Arca, the New York Stock Exchange's all-electronic U.S. trading platform, on May 11 under the symbols UMM for 'up' and DMM for 'down.'
The products should attract a range of investors from the retail-level homeowner interested in diversifying their exposure to housing to foreigners who want to play in U.S. real estate, Masucci said.
But among the initial investors, bears trump bulls.
Par value of both up and down shares is $25, but up shares are selling at a discount -- about $15.50 per share -- and down shares are selling at a premium, about $34.50 per share.
(Reporting by Helen Chernikoff; Editing by Richard Chang) Keywords: MACROSHARES/IPO (helen.chernikoff@thomsonreuters.com; +1 646 223 6127; Reuters Messaging: helen.chernikoff.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
The decision was made on Tuesday afternoon to keep selling shares in the products until next week because there was more interest than the company could satisfy, Chief Executive Sam Masucci told Reuters.
MacroMarkets will determine a revised trading date for the shares once it decides to stop selling them.
The instruments are a linked pair of exchange-traded trusts pegged to the Standard & Poor's/Case-Shiller index measuring home prices in 10 major U.S. cities.
'The index is representative of about 30 percent of the housing market,' Masucci said. 'That's equivalent to a portfolio of about 25 million homes.'
Housing bulls buy shares in the 'up' trust while bears invest in the 'down' trust. If the index moves down, a portion of the up shares' value will shift to the down trust and prices will move accordingly.
MacroMarkets had planned to close pricing on the shares, conducted through an initial-public-offering auction process, on Tuesday. They were scheduled to start trading on the NYSE Arca, the New York Stock Exchange's all-electronic U.S. trading platform, on May 11 under the symbols UMM for 'up' and DMM for 'down.'
The products should attract a range of investors from the retail-level homeowner interested in diversifying their exposure to housing to foreigners who want to play in U.S. real estate, Masucci said.
But among the initial investors, bears trump bulls.
Par value of both up and down shares is $25, but up shares are selling at a discount -- about $15.50 per share -- and down shares are selling at a premium, about $34.50 per share.
(Reporting by Helen Chernikoff; Editing by Richard Chang) Keywords: MACROSHARES/IPO (helen.chernikoff@thomsonreuters.com; +1 646 223 6127; Reuters Messaging: helen.chernikoff.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
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