Huang Xiangyuan: The crux of the warrant issue does not lie in speculation
http://www.sina.com.cn 09:39, September 8, 2006 Daily Economic News
Special writer Huang Xiangyuan
The "doomsday round" bet between Baoquan and Wanquan has been closed, but for the speculation of the overall share reform warrants, the game of warrants has just begun, far from the end of the crisis.
In theory, as a complete gamble, there is no "conclusion" until the exercise date. On the whole, there are still 5 in the light year when Baoquan and Wanquan will become the "doomsday wheel". They are Shenneng JTP1 ( information quotation forum ) 、 WISCO JTB1 ( information quotation forum ) 、 WISCO JTP1 ( information quotation forum ) 、 Ansteel JTC1 ( information quotation forum ) and Airport JTP1 ( information quotation forum ) 。 Although the "doomsday round" phenomenon is obvious, as long as the last moment of the exercise date is not reached, there may be an opportunity for exercise arbitrage.
The nature of capital is to extract surplus value, and the bet of "doomsday round" of warrants just turns this simple way of extracting into extremely dramatic bubble speculation. However, from the perspective of the exercise process of Baoquan and Wanquan, it is really puzzling that there are still a large number of holders who spend money to exercise their rights even when they know that the exercise value is zero.
Strangely, with the encouragement and support of the management, warrants have become an expedient measure to help major shareholders who pay less or no consideration to muddle through the share reform, and objectively become part of the consideration. Although most warrants themselves do not have real value, just because of the speculative characteristics, coupled with the trading mechanism of T+0 and easing the price limit that the market authorities deliberately provide, which makes the warrants have an inestimable speculative value in the limited time of their existence. For warrant issuers, they can not only pay the cost of share reform at zero consideration, but also enjoy the benefits of full circulation and equity incentive without any effort. They really benefit, and certainly benefit a lot.
stay capital market High interest and high risk are always closely linked, especially for warrants with Chinese characteristics. Now it seems that no matter the trading on the last day of the "doomsday round" or the speculation of the warrants attached to the regular shares before the exercise date, regardless of the final result, it is all completed in the market. Based on the illusion and fantasy of self deception, the ultimate result is nothing more than a pile of "stock ashes", "power ashes" and "rotation ashes" that contribute to the share reform and major shareholders.
The issue of warrants is essentially a system issue. Recent signs indicate that the management seems to have realized the possible problems of warrant speculation and intended to "cool" the overheating of warrants and the overall market. However, the performance of the relevant people of SSE in defending Baoquan shows that what really needs reflection is not the hype of warrants, even excessive hype, but whether the overly utilitarian share reform method has created a new rent-seeking tool? Is the market institutional arrangement still creating new market risks? The "doomsday round" hype is so crazy. Is the bluff supervision still worthy of the responsibility of the regulator, and also worthy of its own conscience?
