Following up on its news release dated 10 March 2006 on capital adjustment to Hongkong Electric (HEH) Futures and Options, Hong Kong Exchanges and Clearing Limited (HKEx) has announced the arrangements for the adjustment to the contract terms of all open HEH Futures and Options contracts in existence after market close on 28 April 2006, the business day immediately before the ex-dividend day, which is 2 May 2006, to account for HEH’s proposed special dividend of $0.73 per share.
Highlights of the adjustment arrangements to HEH Futures and Options contracts are attached below. Investors should consult their brokers for further details, or if they have any questions regarding the adjustment.
HEH Futures Contracts
After the market close on 28 April 2006:
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1)
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The adjusted contracted prices (ACP) will be obtained by the following formula and rounded to nearest two decimal places:
Contracted prices of outstanding HEH Futures contracts x [(S- 1.01 - 0.73) / (S- 1.01)]
where S is the closing price of HEH shares on the business day prior to the ex-dividend date, $1.01 is the final dividend and $0.73 is the special dividend announced on 9 March 2006; and
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2)
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An adjusted contract multiplier will be obtained by the following formula and rounded to the nearest four decimal places:
Contracted prices of outstanding HEH Futures contracts x 500 / ACP
where the contract multiplier of HEH Futures contract is 500 shares.
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On the ex-dividend date:
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1)
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The adjusted HEH Futures contracts (adjusted contracts) will be traded under the temporary trading symbol HHA and the contract months will be May, June, July, September and December 2006. On and after 2 May 2006, no new contract month under HHA will be listed and the adjusted contract months under HHA will be available for trading until expiration; and
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2)
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The available contract months for standard HEH Futures contracts with the original contract multiplier of 500 shares (standard contracts), under the original trading symbol HEH, will be May, June, July, September and December 2006. New contract month under HEH will be listed according to the normal procedures.
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The above capital adjustment, once made, will be conclusive and binding on all HEH Futures contracts.
HEH Options Contracts
After the market close on 28 April 2006:
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1)
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The adjusted exercise prices (AEP) will be obtained by the following formula and rounded to nearest two decimal places:
Exercise prices of outstanding HEH Option series x [(S – 1.01 – 0.73) / (S – 1.01)]
where S is the closing price of HEH shares on the business day prior to the ex-dividend date, $1.01 is the final dividend and $0.73 is the special dividend announced on 9 March 2006; and
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2)
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An adjusted contract size will be obtained by the following formula and rounded to the nearest four decimal places:
Exercise prices of outstanding HEH Option series x 500 / AEP
where the contract size of HEH Option Series is 500 shares.
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On the ex-dividend date:
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1)
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The adjusted HEH Options contracts (adjusted contracts) will be traded under the temporary trading symbol HHA and the expiry months will be May, June, July, September and December 2006. On and after 2 May 2006, no new expiry month and series under HHA will be listed and the adjusted expiry months and series under HHA will be available for trading until expiration; and
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2)
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The available expiry months for standard HEH Options Contracts with the original contract size of 500 shares (standard contracts), under the original trading symbol HEH, will be May, June, July, September and December 2006. New expiry month and series under HEH will be listed according to the normal procedures.
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The above capital adjustment, once made, will be conclusive and binding on all HEH Options contracts.