Hong Kong Exchanges and Clearing Limited (HKEx) announced the arrangements for the adjustment to the contract terms of all outstanding Swire Pacific A’s (Swire A) futures and option contracts in existence after the market close on the business day immediately before the ex-date to account for conditional special interim dividend in specie of one share of Swire Propoerties Limited for every 10 Swire A shares.
Highlights of the adjustment arrangements are set forth below. Investors should consult their brokers for further details, or if they have any questions regarding the adjustment.
Swire A Futures
Trading Arrangements
Outstanding positions of Swire A futures which exist after the market close on the business day immediately before the ex-date will be transferred to a temporary trading symbol SWB. Since the value of the Entitlement is not available until the IPO price of SPL is fixed, trading of outstanding positions under temporary trading symbol SWB will be suspended from the ex-date to the business day after the IPO price is fixed (i.e. up to IPO price fixing date + 1 day).
On the ex-date, new contract months of Swire A futures (500 Swire A shares per contract on an ex-entitlement basis) will be introduced for trading under the standard trading symbol SWA.
When the value of the Entitlement is determined upon the announcement of the IPO price of SPL, capital adjustment will be made to outstanding positions under trading symbol SWB and the adjusted positions will be transferred to trading symbol SWC. Positions under trading symbol SWC will commence trading from the second business day after the IPO price fixing date (IPO price fixing date + 2 days). Contract months under trading symbol SWB will remain suspended.
Adjustment will be made after the close of trading on the business day before the trading commencement date of positions under trading symbol SWC. Details of the adjustment procedures are as follows:
|
Adjustment Ratio (AR)
|
(underlying stock closing price before the ex-date – Entitlement) / (underlying stock closing price before the ex-date)
|
Rounded to the nearest 4 decimal places
|
|
Adjusted Contracted Price (ACP)
|
Contracted price of outstanding futures contract months x AR
|
Rounded to the nearest 2 decimal places
|
|
Adjusted Contract Multiplier (ACM)
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(Contracted price of outstanding futures contract months x 500 shares) /ACP
|
Rounded to the nearest 4 decimal places
|
Trading of Adjusted and Standard Contracts
Details of the parallel trading arrangements from the ex-date onwards are shown below:
|
Standard
|
SWA
|
Swire A (ex-entitlement)
|
500
|
Ex-date
|
From the ex-date onwards
|
Yes
|
|
Adjusted
|
SWB
|
Swire A & Entitlement
|
500
|
Ex-date
|
Nil
|
No
|
|
Adjusted
|
SWC
|
Swire A (ex-entitlement)
|
ACM
|
IPO price fixing date
+2 days
|
From introduction date to30 Dec 2010
|
No
|
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.
Swire A Options
Trading Arrangements
Outstanding positions of Swire A options which exist after the market close on the business day immediately before the ex-date will be transferred to a temporary trading symbol SWB. Since the value of the Entitlement is not available until the IPO price of SPL is fixed, trading of outstanding positions under temporary trading symbol SWB will be suspended from the ex-date to the business day after the IPO price is fixed (i.e. up to IPO price fixing date + 1 day).
On the ex-date, new series of Swire A Options (deliverable is 500 Swire A shares per contract on an ex-entitlement basis) will be introduced for trading under the standard trading symbol SWA.
When the value of the Entitlement is determined upon the announcement of the IPO price of SPL, capital adjustment will be made to outstanding positions under trading symbol SWB and the adjusted positions will be transferred to trading symbol SWC. Positions under trading symbol SWC will commence trading from the second business day after the IPO price fixing date (IPO price fixing date + 2 days). Series under trading symbol SWB will remain suspended.
Adjustment will be made after the close of trading on the business day prior to the trading commencement date of positions under trading symbol SWC. Details of the adjustment procedures are as follows:
|
Adjustment Ratio (AR)
|
(underlying stock closing price before the ex-date – Entitlement) / (underlying stock closing price before the ex-date)
|
Rounded to the nearest 4 decimal places
|
|
Adjusted Exercise Price (AEP)
|
Exercise price of outstanding option series x AR
|
Rounded to the nearest 2 decimal places
|
|
Adjusted Contract Size (ACS)
|
(Exercise price of outstanding option series x 500 shares) /AEP
|
Rounded to the nearest 4 decimal places
|
Trading of Adjusted and Standard Contracts
Details of the parallel trading arrangements from the ex-date onwards are shown below:
|
Standard
|
SWA
|
Swire A (ex-entitlement)
|
500
|
Ex-date
|
From the ex-date onwards
|
Yes
|
|
Adjusted
|
SWB
|
Swire A & Entitlement
|
500
|
Ex-date
|
Nil
|
No
|
|
Adjusted
|
SWC
|
Swire A (ex-entitlement)
|
ACS
|
IPO price fixing date + 2 days
|
From introduction date to 30 Dec 2010
|
No
|
Investors should note that the cash settlement amount of adjusted and standard option series on the expiry day will be calculated using their respective strike prices and contract sizes. There will not be any changes to the number of open positions and other contract terms after the transfer of positions.
Information on the clearing, settlement and risk management arrangements is in the Exchange Participant circulars for Swire A Futures and Swire A Options on the HKEx website.
Ends