Stockbroking sources say they expect several call warrant issues, including one on the benchmark Straits Times Index, to be issued soon by US and European investment houses with large derivatives desks based in Hong Kong.

Just this week, Bankers Trust announced it was launching a first-ever American style put warrant on the Dow Jones Industrial Average to be listed on the Stock Exchange of Singapore (SES).

It is expected to issue a call warrant on the Dow once it gets approval from the authorities.

SG Securities, the largest warrant issuer in Hong Kong, said it has done its homework on the Singapore market and plans to distribute a warrant newsletter to Singapore investors before the end of the month.

Besides foreign interest, DBS Bank has leapt into the call warrant market with two issues within five weeks.

Its latest 50 millioncall warrant issue on Keppel Bank comes soon after is highly successful Singapore Airlines warrant issue, which was three times subscribed.

SES listing manager Sim Young Nam declined comment on how many issues were pending with the exchange, adding that it was up to issuers to make the announcements when they were ready.

"They have applied to us but they may or may not launch depending on market conditions," he said.

Brokers said the recent sharp market rally coupled with the approaching Christmas holidays could lead many issuers to hold back until the new year.

"It is possible to see a bunch of new issues, not just call warrants, being launched in January," Sim said.

Merrill Lynch, a big warrant player in the Hong Kong market, has plans for Singapore but any issue would would only come out in the new year, said Simon Brookhouse, managing director for equity linked products at Merrill Lynch.

Industry sources say the SES has been working hard to develop the call warrant market for retail investors,especially after its over the counter market (CLOB) for Malaysian stocks nore or less folded following the imposition of capital controls in Malaysia in September.

"The regulators seem very keen to develop the market, and the warrant market is a retail market," Brookhouse said.

"The SES is trying to develop other products after CLOB. They want products which are a bit speculative, which many of the CLOB counters were, and warrants fit the bill," a derivatives trader with another American investment bank based in Hong Kong said.

SES has made a number of changes to the rules for warrant issuers recently, allowing for greater participation among the man in the street.

Among the changes were allowing the warrants to be quoted in Singapore dollars instead of US dollars as previously, smaller lot sizes of 1,000, and, as in the case of the SIA issue, allowing investors to apply for the warrants through automated teller machines (ATMs).

While the warrant market looks set to expand, it is unlikely to seeSingapore brokers acting as issuers for a while as they lack the financial strength, specifically the shareholders' funds of $500 million, as required by the Monetary Authority of Singapore.

Only Vickers Ballas, in the midst of a reverse takeover by goverment-linked ST Capital, meets the shareholder funds requirement.

Instead, Singapore brokers would most likely participate in such issues as distributors.

In the Bankers Trust warrant issue on the Dow, stockbrokers Kay Hian acted as the selling agents.

Kay Hian deputy managing director Tang Wee Lock said he could not "see Kay Hian doing dynamic hegding of a warrant issue."

"We don't have the capital, we don't have the expertise and we don't have a big appetite for risk. I would rather be the selling agent than take the risks," Tang said.

He said foreign investment houses with a large derivative portfolio would have a natural advantage as they could hedge and manage their risk better.