Hong Kong Exchanges and Clearing Limited (HKEx) has announced the arrangements for the adjustment to the contract terms of all open Hong Kong & China Gas (HKG) futures and option contracts in existence after the market close on 7 May 2007, the business day immediately before the ex-bonus date (ex-date), which is 8 May 2007, to account for bonus shares to be issued on the basis of one bonus share for every 10 existing ordinary shares.
Highlights of the adjustment arrangements to HKG futures and options contracts are set forth below. Investors should consult their brokers for further details, or if they have any questions regarding the adjustment.
|
Underlying Stock |
The Hong Kong and China Gas Company Limited
|
|
Corporate Action |
One bonus share for every 10 existing
shares |
|
Ex-date |
8 May 2007 |
HKG Futures
Adjustment Procedures
Adjustment will be made to the open positions of HKG futures contracts which exist after the market close on 7 May 2007, the business day immediately before the ex-date. The details of the adjustment procedures are as follows:
|
Adjustment Term |
Formula |
|
Adjustment Ratio (AR) |
10 shares / (10 shares + 1 bonus share) =
0.9091 |
|
Adjusted Contracted Prices (ACP) |
Contracted prices of outstanding stock
futures contract x AR |
|
Adjusted Contract Multiplier |
Contracted prices of outstanding stock
futures contract |
Parallel Trading
After the market close on 7 May 2007, 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, 8 May 2007. Details of the parallel trading on and after the ex-date are shown below:
|
Contract |
Trading
Symbol |
Contract
Multiplier |
Available
for Trading |
Addition
of New Contract Months |
|
Adjusted |
HKA |
1,100 |
From
ex-date to |
No |
|
Standard |
HKG |
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.
HKG Options
Adjustment Procedures
Adjustment will be made to the open positions of HKG option series which exist after the market close on 7 May 2007, the business day immediately before the ex-date. The details of the adjustment procedures are as follows:
|
Adjustment Term |
Formula |
|
Adjustment Ratio (AR) |
10 shares / (10 shares + 1 bonus share) =
0.9091 |
|
Adjusted Exercise Price (AEP) |
Exercise price of outstanding option series
x AR |
|
Adjusted Contract Size |
Exercise price of outstanding option series
x |
Parallel Trading
After the market close on 7 May 2007, 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, 8 May 2007. Details of the parallel trading on and after the ex-date are shown below:
|
Contract |
Trading
Symbol |
Contract
Size |
Available
for Trading |
Addition
of New Option Series on and after the Ex-date |
|
Adjusted |
HKA |
Approx
1,100 with fractional shares |
From
ex-date to |
No |
|
Standard |
HKG |
1,000 |
From
ex-date onwards |
Yes |
Investors should note that the cash settlement amount of adjusted and standard option series on the expiry day will be calculated using their respective contract sizes. There will not be any changes to the number of open positions and other contract terms after the transfer of positions.
