Hong Kong Warrants Issuance: Key Highlights and Market Data

Strategic Insights -

Hong Kong's securities market has seen a surge in warrant issuances, with Haitong International Securities Company Limited recently announcing the issuance of five new warrant programs. These warrants offer investors the opportunity to bet on the performance of six major Hong Kong-listed companies: ZTE Corporation, PetroChina Company Limited, CK Hutchison Holdings Limited, Anhui Conch Cement Company Limited, Bank of China Limited, and multiple classes of shares from these companies. The warrants are set to expire on various dates between September 2020 and January 2021.

Key Takeaways:

  • The five warrant programs have a combined issue size of 350 million warrants, with an issue price ranging from HK$0.16 to HK$0.43 per warrant.
  • The warrants are cash-settled and are based on the arithmetic mean of the closing prices of one share in respect of each of the five business days immediately preceding the expiry date.
  • The expiry dates for the warrants vary between 23 September 2020 and 29 January 2021, with the implied volatility ranging from 27.00% to 63.00%.
  • The gearing ratio for the warrants ranges from 4.27x to 36.91x, with the premium ranging from 13.29% to 25.44%.
  • The warrants are listed on the Hong Kong Stock Exchange and are traded under the following stock codes: 28389, 28387, 28382, 28379, and 28377.
  • The liquidity provider for the warrants is multiple brokers with ID 9724.
  • The maximum number of shares related to the warrants ranges from 7,000,000 to 70,000,000 shares.

Statistics:

  • The combined issue size of the five warrant programs is 350 million warrants.
  • The average issue price of the warranties is HK$0.29.
  • The closing prices of one share for the five business days preceding the expiry date will determine the cash settlement amount.
  • The gearing ratio ranges from 4.27x to 36.91x.
  • The premium ranges from 13.29% to 25.44%.

Sources:

  • Haitong International Securities Company Limited. (2020). Announcement Regarding Warrant Issuance.
  • Hong Kong Stock Exchange. (2020). Listing Rules.