Shareholders' school: CMB warrant answering

Shanghai Securities Journal Soochow Securities Research Institute Jiang Fan

Miss Zhang:

The share reform plan of China Merchants Bank (600036) is to obtain 2.5963 shares for every 10 outstanding shares (including 0.8589 shares for every 10 shares transferred by the listed company to all shareholders) and 6 European put warrants with the exercise price of RMB 5.65.

I still hold 10000 shares on the equity registration date. I want to know how many shares I will have after the share reform? How many warrants will you get? If you sell stocks on the day of resumption, do you still hold warrants? Can warrants and stocks be sold separately? How to grasp the arbitrage space? What is the difference between this warrant and WISCO's warrant?

Mr. Wu, Shanghai

Mr. Wu:

Since you have held 10000 shares of China Merchants Bank on the equity registration date

In addition, your 10000 shares of China Merchants Bank will become 12596.3 shares when the share reform is resumed, with a total increase of 2596.3 shares. Specifically, 858.9 shares are due to the holders of tradable shares and 1737.4 shares are the consideration paid by the holders of non tradable shares. Therefore, even if you sell all the shares on the day of resumption, you will still hold 6000 warrants.

For the arbitrage opportunities between warrants and stocks, according to the recent strong performance of bank stocks, the price of China Merchants Bank after the resumption of trading will certainly be higher than the actual ex right of 6.09 yuan, which will be significantly higher than the initial exercise price of China Merchants warrants of 5.65 yuan. In this view, Vanke and its nine month put warrants in Shenzhen Stock Exchange have more reference value than WISCO in their trend after share reform and resumption. Because the stock price of the same put warrant and the same stock reform will be significantly higher than the initial exercise price, and the scale of the warrant is also huge, which determines that its warrants have only speculative value and no investment value.

Although the overall performance of the warrant market in the recent period is poor, as the bank warrant issuing company is the first, it is not ruled out that on the first day, it will still be closed to trading limits like other warrants, but after that, like Vanke warrants, it will be unable to avoid the trend of shock and decline.

The article is purely a personal point of view, for reference only, and is responsible for its own writing. Readers enter the market accordingly, and bear the risk

The author declares that, within the knowledge of the institution and myself, the institution, myself and the stakeholders in the property and the evaluated