First U.S. Silver ETF Launches Friday A.M.First U.S. Silver ETF Launches Friday A.M.
By: Dorothy Kosich
Posted: '27-APR-06 23:00' GMT © Mineweb 1997-2004
RENO--(Mineweb.com) As the first U.S. Silver ETF is officially launched by Barclays Global Investors Friday morning, Silver Institute President Phil Baker, the Chairman and CEO of Hecla Mining, told Mineweb that he views it as a positive move that will, ultimately, generate more interest in silver equities.
Michael DiRenzo, Executive Director of the Silver Institute, noted that the "this investment vehicle will give a wide range of investors the opportunity to diversify their portfolio to silver."
Christine Hudako of Barclays confirmed to Mineweb Thursday that the silver ETF will launch Friday morning on AMEX under the name iShares Silver Trust, (SLV). Earlier this week, Barclays deposited 1.5 million ounces of silver with the JP Morgan Chase Bank to back its 150,000 ETF shares. Each share is equivalent to 10 ounces of silver.
The SEC cleared the silver ETF Thursday. SEC spokesman John Heinie told the Associated Press that the registration statement had been declared effective.
As the news made the round of the markets, spot price silver rose to $13.18/ounce on the COMEX Thursday, but ended the day at $12.60.
The Silver Users Association had opposed the silver ETF, contending that the trust would take a large amount of silver off the market and increase prices, which would hurt manufacturers. Silver recently reached a 23-year high of $14.69/oz on the futures market.
While Baker admitted that the silver miners who backed the silver ETF may be taking a risk that it will reduce investor interest in equities, he believes that it will attract more potential silver investors to the market, generating increased interest in silver equities. Traders anticipate that the ETF will attract money from family trusts and institutional funds, advisers and retail investors, which would like to get convenient exposure to silver.