Property derivatives fail to offer hedge options against price collapse
The development of a property derivatives market in Asia stalled during the financial crisis of 2007-2008 and has failed to regain any real momentum, presenting a gloomy outlook for the business. But some parties believe the introduction of retail products could transform volumes
The property derivatives (PD) market in Asia is still waiting for investor confidence to return, despite a property market recovery across much of the region during the past 18 months. Property derivatives are over-the-counter financial products that offer synthetic exposure to physical property and can be used as an investment tool or to hedge risks linked with real estate exposures.
In Hong Kong, the main centre of activity for the market in Asia, $300 million of notional in property
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