Credit Suisse Issues Warrants for Four Hong Kong- Listed Companies

Strategic Insights -

Credit Suisse (Hong Kong) Limited has announced the issuance of warrants for four Hong Kong-listed companies: Semiconductor Manufacturing International Corporation, Anhui Conch Cement Company Limited, China Communications Construction Company Limited, and China Literature Limited. The warrants will allow investors to buy or sell shares in these companies at a predetermined price. The issuance size ranges from 40 million to 100 million warrants, with a liquidity provider designated for each series.

The warrants have different styles, such as European-style cash settled call and put warrants, and will expire on November 23, 2020. The issue price per warrant varies from HK$0.250 to HK$0.300, and the exercise price ranges from HK$5.550 to HK$69.880. The implied volatility and effective gearing of the warrants also vary across the four series.

Key Takeaways:

  • The issuance of warrants provides investors with the opportunity to buy or sell shares in four Hong Kong-listed companies at a predetermined price.
  • The four series of warrants have different styles, including European-style cash settled call and put warrants.
  • The issue price per warrant varies from HK$0.250 to HK$0.300, and the exercise price ranges from HK$5.550 to HK$69.880.
  • The implied volatility and effective gearing of the warrants also vary across the four series, ranging from 43.45% to 79.80% and 2.02x to 5.64x, respectively.
  • The warrants will expire on November 23, 2020, and the settlement date will be the third CCASS Settlement Day after the later of the expiry date and the day on which the average price is determined.
  • The four companies for which the warrants have been issued are Semiconductor Manufacturing International Corporation, Anhui Conch Cement Company Limited, China Communications Construction Company Limited, and China Literature Limited.

Statistics:

  • Issue size: 50 million, 40 million, 40 million, and 100 million warrants for the four series, respectively.
  • Exercise price: HK$16.280, HK$69.880, HK$5.550, and HK$52.880 for the four series, respectively.
  • Implied volatility: 73.37%, 45.08%, 43.45%, and 55.19% for the four series, respectively.
  • Effective gearing: 2.19x, 5.64x, 5.70x, and 5.14x for the four series, respectively.
  • Issue date: May 21, 2020, for all series.

Sources:

  • https://www1.hkexnews.hk/listedco/listconews/sehk/2020/0518/2020051800744.pdf