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BOCI Securities Limited Issues Announcement for CBBCs on Stocks of Hong Kong Listed Companies

Strategic Insights

— 2 min read

The Hong Kong Stock Exchange has listed a new series of Cash-Settled Bull and Bear Contracts (CBBCs) related to the stocks of several major Hong Kong listed companies, including HSBC Holdings plc, Geely Automobile Holdings Limited, Xiaomi Corporation, Tencent Holdings Limited, and Tencent Holdings Limited. The CBBCs, which were issued by BOCI Securities Limited, have a total issue size of 40 million units, with each unit related to 2,000 shares of the respective company's stock. The CBBCs are designed to track the performance of the underlying stocks, with the bull CBBCs paying out based on the difference between the closing price and strike price, while the bear CBBCs pay out based on the difference between the strike price and closing price.

Key Takeaways:

  • The CBBCs are related to the stocks of five Hong Kong listed companies: HSBC Holdings plc, Geely Automobile Holdings Limited, Xiaomi Corporation, Tencent Holdings Limited, and Tencent Holdings Limited.
  • The total issue size of the CBBCs is 40 million units.
  • Each unit of the CBBC is related to 2,000 shares of the respective company's stock.
  • The CBBCs have a maximum number of shares to which they relate, ranging from 400,000 to 4,000,000 shares per series.
  • The issue dates for the CBBCs are 29 May 2020, with the listing date being 5 June 2020.
  • The Expiry Date for all series of CBBCs is 31 December 2020, with the Settlement Date being the third CCASS Settlement Day after the end of the MCE Valuation Period or the later of the Expiry Date and the day on which the Closing Price is determined in accordance with the Conditions.
  • The Quality of the underlying stocks are: HSBC Holdings (0.25 (HK$)), Geely Automobile Holdings (0.25 (HK$)), Xiaomi Corporation (0.25 (HK$)), Tencent Holdings Limited (0.29 (HK$)), Tencent Holdings Limited (0.25 (HK$)).
  • The qualities of the underlying stocks are: HSBC Holdings (24.69%), Geely Automobile Holdings (9.25%), Xiaomi Corporation (12.81%), Tencent Holdings Limited (0.19%), and the Tencent Holdings Limited (1.85%), The Gearing for the underlying stocks was at 2.87x (HSBC Holdings), 4.24x (Geely Automobile Holdings), 4.81x (Xiaomi Corporation), 14.15x (Tencent Holdings Limited), 16.42x (Tencent Holdings Limited).

Statistics:

  • Total issue size of CBBCs: 40,000,000 units.
  • Number of shares per unit of CBBC: 2,000 shares.
  • Maximum number of shares to which the CBBCs relate: 400,000 to 4,000,000 shares per series.
  • Issue date: 29 May 2020.
  • Listing date: 5 June 2020.
  • Expiry Date: 31 December 2020.
  • Settlement Date: the third CCASS Settlement Day after the end of the MCE Valuation Period or the later of the Expiry Date and the day on which the Closing Price is determined in accordance with the Conditions.
  • Settlement Currency: Hong Kong dollars.
  • Effective Gearing: 2.87x (HSBC Holdings), 4.24x (Geely Automobile Holdings), 4.81x (Xiaomi Corporation), 14.15x (Tencent Holdings Limited), 16.42x (Tencent Holdings Limited).
  • Premium: 24.69% (HSBC Holdings), 9.25% (Geely Automobile Holdings), 12.81% (Xiaomi Corporation), 0.19% (Tencent Holdings Limited), 1.85% (Tencent Holdings Limited).

Sources:

  • BOCI Securities Limited announcement document (https://www1.hkexnews.hk/listedco/listconews/sehk/2020/0601/2020060102693.pdf).

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