SEHK Announce Capital Adjustment to HKB Options Series

The SEHK Options Clearing House Ltd. announced that subject to the one for three share sub-division of HSBC Holdings Plc (HKB) and commencement of dealing in the New Shares becoming effective on July 5, 1999, the contract terms of all existing options series on HKB will be adjusted under the Options Clearing Rules by the adjustment ratio of 0.3333. This means that the adjusted exercise price will be 0.3333 times the old exercise price, and the adjusted contract size will be the old contract value of 400 shares times the old exercise price, divided by the adjusted exercise price. The capital adjustment will be carried out after the close of business on July 2, 1999. After the capital adjustment and from July 5, 1999 onwards, the adjusted series will be denoted as Version 1 and the adjusted contract size will represent 1200 New Shares per contract. Due to rounding during the adjustment, the adjusted contract size may carry fractions of a share. Upon exercise of the adjusted series, the fractional shares of each contract will be settled in cash on the day of exercise while the integral portion will be settled by physical delivery under Central Clearing and Settlement System under normal procedures. Price information of these Version 1 series will be displayed in teletext pages 3075 / 6. New series of standard contract size denoted as Version 0 will be generated in accordance with Operational Trading Procedures after the capital adjustment and from July 5, 1999 onwards. The standard contract size will represent 400 New Shares per contract. Price information of these Version 0 series will be displayed in teletext pages 3001 / 2. Investors should note that the Version 1 and Version 0 option series will be available for trading in parallel until all Version 1 series expire on March 30, 2000, when only Version 0 series will remain. The Version 1 and Version 0 series are distinct series and the positions under each version cannot be offset against each other. Investors are advised to consult their option brokers for further details and pay attention as to the series version specifications when dealing with matters relating to the trading of HKB options contracts, particularly when placing orders or exercising instructions.