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ETFS Physical Platinum Shares (PPLT) and ETFS Physical Palladium Shares (PALL) the only U.S.-listed ETFs backed by holdings of physical palladium and platinum, will issue more shares of those poplular ETFs to meet rising..
27 Apr 2010
NEW YORK (Commodity Online): ETFS Physical Platinum Shares (PPLT) and ETFS Physical Palladium Shares (PALL) the only U.S.-listed ETFs backed by holdings of physical palladium and platinum, will issue more shares of those poplular ETFs to meet rising demand from investors.

ETF Securities originally issued 4.78 million shares of the ETFS Physical Platinum Shares (NYSE: PPLT) about 75% have been sold. The firm will raise the total of unsold shares in PPLT to 7.82 million, inclduing 1.38 million from the original lot.

About half of the initial offering of 12.88 million in the ETFS Physical Palladium Shares ETF (NYSE: PALL) have been sold and ETF Securities will bring the total of unsold shares to 12.11 million.

Since being introduced in January, PPLT and PALL have acquired a combined $881 million in assets. PALL is up 25% since its debut and PPLT is up about 10%.

After a nine-month wait, physical metal platinum and palladium exchangetraded funds (ETFs) were launched in the US on 8 January by a subsidiary of UK-based ETF Securities. Trading on NYSE Arca, the two products are called the ETFS Physical Platinum Shares (share code PPLT) and the ETFS Physical Palladium Shares (PALL).

In their first 11 days of trading the platinum product acquired 194,000 oz of metal, and the palladium product had just short of 400,000 oz. This compares well to the already existing products, the UK ETF Securities and the Swiss ZKB, which collectively at the end of 2009 held 676,787 oz of platinum and 1,163,302 oz of palladium. But they have been in operation for nearly three years; it took the UK ETFs 40 (for platinum) weeks and more than two years (for palladium) to match the figures that the new US product has already managed. Trading volumes are higher still.

ETFS Physical Platinum Shares (PPLT) and ETFS Physical Palladium Shares (PALL) began trading on the NYSE Arca platform, where many other ETFs are also listed. The new ETFs are expected to give platinum group metals a shot in the arm and fill some of the void left by lower demand from the beleaguered auto sector.

Predicting the future course of bullion and precious metals, ScotiaMocatta, the leading bank and global leader in bullion trade, had said that investor interest should be sustained by the promising medium-term outlook for platinum and that if PGM ETFs are launched in the US then the amount of metal held in these funds could rise by an order of magnitude.

The market does need to remain aware, however, that these ETFs are highly liquid and that a heavy spell of redemptions could prompt a significant fall in price, the bank said. This possibility is, though, not given a high probability, given the outlook for a recovery in industrial demand and the degree to which industrial users have run down their inventories.
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