Arrangements for Adjustment of China Resources Enterprise Futures and Options
Market Operations
05 Dec 2006
Hong Kong Exchanges and Clearing Limited (HKEx) has announced the arrangements for the adjustment to the contract terms of all open China Resources Enterprise (CRE) Futures and Options contracts in existence after the market close on 13 December 2006, the business day immediately before the ex-dividend day of 14 December 2006, to account for CRE’s proposed special dividend of $1.00 per share.
Highlights of the adjustment arrangements to CRE Futures and Options contracts are attached below. Investors should consult their brokers for further details, or if they have any questions regarding the adjustment.
CRE Futures
After the market close on 13 December 2006:
|
where S is the closing price of CRE shares on the business day prior to the ex-dividend date and $1.00 is the special dividend announced on 29 November 2006.
|
| 2) |
An adjusted contract multiplier will be obtained by the following formula and rounded to the nearest four decimal places:
|
|
Contracted prices of outstanding CRE Futures contracts x 2,000 / ACP
|
|
where the contract multiplier of a CRE Futures contract is 2,000 shares. |
Trading symbols:
|
Details of CRE and CRA Futures contracts available for trading from 14 December 2006 are in the table below. |
Trading
Symbol |
Available for Trading |
Addition of New Contract Months |
14 December 2006 to
28 December 2006 |
From 29 December 2006 Onwards |
CRE
(Standard) |
Yes |
No |
No |
CRA
(Adjusted) |
Yes |
No |
No |
Note: HKEx announced on 8 June 2006 that trading in CRE Futures would be gradually discontinued.
Open positions:
After the market close on 13 December 2006, open positions in CRE Futures contracts will be transferred to the respective adjusted CRA Futures contracts. It should be noted that only the contracted prices and contract multiplier are being adjusted; there will not be any changes to the number of open positions and contract months for existing CRE Futures contracts whatsoever after the adjustment. All such open contracts will be traded and settled under the adjusted contract terms from 14 December 2006 onwards.
CRE Options
After the market close on 13 December 2006:
|
where S is the share closing price of CRE on the business day prior to the Ex-dividend Date, $1.00 is the special dividend announced on 29 November 2006.
|
| 2) |
An adjusted contract multiplier will be obtained by the following formula and rounded to the nearest four decimal places:
|
|
Exercise Prices of outstanding CRE Options Contracts x 2,000 / AEP
|
|
where the Contract Size of standard CRE Options Contracts is 2,000 shares. |
Trading symbols:
|
Details of CRE and CRA Options contracts available for trading from 14 December 2006 are in the table below. |
Class
Symbol |
Availability For Trading |
Addition of New Options Contracts on and after 14 December 2006 |
Information
Pages |
14 December 2006 to
28 December 2006 |
From 29 December 2006 Onwards |
| CRE(Standard) |
Yes |
No |
No |
3027/3028 |
| CRA(Adjusted) |
Yes |
No |
No |
3147/3148 |
Note: HKEx announced on 8 June 2006 that trading in CRE Options would be gradually discontinued.
Open positions:
After the market close on 13 December 2006, open positions in CRE Options contracts will be transferred to the respective adjusted CRA Options contracts. It should be noted that only contract sizes and exercise prices are being adjusted; there will not be any changes to the number of open positions and contract months for existing CRE Options contracts whatsoever after the adjustment. All such open contracts will be traded and settled under the adjusted contract terms from 14 December 2006 onwards.