Hong Kong Futures Exchange Limited and The Stock Exchange of Hong Kong Limited, wholly-owned subsidiaries of Hong Kong Exchanges and Clearing Limited, have jointly announced the arrangements for capital adjustment to China Netcom Group Corporation (Hong Kong) Limited (Netcom) futures and option contracts and name change to the underlying stock of China Unicom Limited (Unicom) futures and option contracts to account for a proposed merger. 

Highlights of the adjustment arrangements are attached below.  Investors should consult their brokers for further details.

Netcom Futures and Options Contracts

Subject to Unicom and Netcom shareholders’ approvals on the proposed merger of Unicom and Netcom at the Extraordinary General Meetings to be held on 16 September 2008 and 17 September 2008 respectively, capital adjustment to the Netcom futures and option contracts will be made based on the corporate action announced below:

Netcom Futures Contracts

Adjustment will be made to the open positions of the Netcom futures contracts which exist after the market close on 6 October 2008 (last day for dealings) as follows:

Netcom Option Contracts

Adjustment will be made to the open positions of the Netcom option contracts which exist after the market close on 6 October 2008 as follows:

After the market close of 6 October 2008, the open positions of Netcom futures and option contracts will be adjusted, according to the above procedures, and changed to the adjusted Unicom futures and option contracts on a one-to-one basis; ie one open position in a Netcom futures or option contract will become one open position in an adjusted Unicom futures or option contract. 

From 8 October 2008 (the effective date) onwards, the adjusted Unicom futures and option contracts will be available for trading while the Netcom futures and options contracts will be cancelled and will no longer exist for trading. The existing standard Unicom futures and option contracts will not be affected in this exercise. 

The adjusted and the existing standard Unicom futures and options contracts are distinct contracts and represented by different trading symbols (CHU for standard Unicom futures and option contacts and CHA for adjusted Unicom futures and option contracts). The adjusted contracts will be available for trading from 8 October 2008 until 29 June 2009; there will not be new contract months or new option series on and after 8 October 2008.

Name Change to Underlying Stock of Unicom Futures and Options

Subject to the Unicom shareholders’ approval on the proposed change of name at the Extraordinary General Meeting to be held on 16 September 2008, name change to the stock futures and option contracts below will be made: