Hong Kong Exchanges and Clearing Limited (HKEx) announced the arrangements for the adjustment to the contract terms of all open Henderson Land Development’s (HLD) futures and option contracts in existence after the market close on the business day immediately before the ex-date to account for HLD’s one bonus warrant for every five shares.
Highlights of the adjustment arrangements are set forth below. Investors should consult their brokers for further details, or if they have any questions regarding the adjustment.
|
Underlying Stock |
Henderson Land Development Company Limited |
|
Corporate Action |
One bonus warrant for every five shares |
|
Subscription Price |
$58 |
|
Ex-date |
16 April 2010 |
HLD Futures
Adjustment Procedures
Adjustment will be made to the open positions of HLD futures contracts which exist after the market close on the business day immediately before the ex-date. The details of the adjustment procedures are as follows:
|
Adjustment Term |
Formula |
Remark |
|
Adjustment Ratio (AR) |
(S – OD – W) / (S – OD) |
Rounded to the nearest 4 decimal places |
|
Adjusted Contracted Price (ACP) |
Contracted price of outstanding futures contract x AR |
Rounded to the nearest 2 decimal places |
|
Adjusted Contract Multiplier (ACM) |
Contracted price of outstanding futures contract x (1,000 shares / ACP) |
Rounded to the nearest 4 decimal places |
Notes:
| 1. | S is the closing price of HLD on the day prior to the ex-date |
| 2. | OD is the ordinary dividend (i.e. $0.7) with ex-date on 16 April 2010 |
| 3. |
W is the theoretical value of the bonus warrant per share |
Trading of Adjusted and Standard Contracts
After the market close on the business day immediately before the ex-date, the open positions will be transferred to the adjusted futures contracts. In addition, new contracts based on the standard contract multiplier will be introduced for trading on the ex-date. Details of the adjusted and standard contracts available for trading on and after the ex-date are shown below:
|
Contract |
Trading Symbol |
Contract Multiplier (Shares) |
Availability For Trading |
Addition of New Futures Contracts |
|
Adjusted |
HLA |
ACM |
From ex-date to |
No |
|
Standard |
HLD |
1,000 |
From ex-date onwards |
Yes |
Investors should note that the cash settlement amount of adjusted and standard futures contracts on the last trading day will be calculated using their respective contract multipliers. There will not be any changes to the number of open positions and other contract terms after the transfer of positions.
HLD Options
Adjustment Procedures
Adjustment will be made to the open positions of HLD option contracts which exist after the market close on the business day immediately before the ex-date. The details of the adjustment procedures are as follows:
|
Adjustment Term |
Formula |
Remark |
|
Adjustment Ratio (AR) |
(S – OD – W) / (S – OD) |
Rounded to the nearest 4 decimal places |
|
Adjusted Exercise Price (AEP) |
Exercise price of outstanding option series x AR |
Rounded to the nearest 2 decimal places |
|
Adjusted Contract Size (ACS) |
Exercise price of outstanding option series x (1,000 shares / AEP) |
Rounded to the nearest 4 decimal places |
Notes:
| 1. | S is the closing price of HLD on the day prior to the ex-date |
| 2. | OD is the ordinary dividend (i.e. $ 0.7) with ex-date on 16 April 2010 |
| 3. |
W is the theoretical value of the bonus warrant per share |
Trading of Adjusted and Standard Contracts
After the market close on the business day immediately before the ex-date, the open positions will be transferred to the adjusted option series. In addition, new option series based on the standard contract size will be introduced for trading on the ex-date. Details of the adjusted and standard contracts available for trading on and after the ex-date are shown below:
|
Contract |
Trading Symbol |
Contract Size(Shares) |
Availability For Trading |
Addition of New Option Series |
|
Adjusted |
HLA |
ACS |
From ex-date to |
No |
|
Standard |
HLD |
1,000 |
From ex-date onwards |
Yes |
Investors should note that the adjusted and standard option series have different contract sizes. There will not be any changes to the number of open positions and other contract terms after the transfer of positions.
Information on the procedures for determining the theoretical price of the bonus warrants is in the Exchange Participant circulars for HLD futures and options on the HKEx website.
