Warrants make retail investors confused again
http://www.sina.com.cn 09:08, September 13, 2006 China Economic Times
-Zhang Wei
Baosteel Warrants and Vanke Warrants have been "closed" successively, and the warrant game in the secondary market has not cooled down. On September 4, Handan Iron and Steel, Baotou Iron and Steel, and Wuhan Iron and Steel once enjoyed a spectacular increase of 14.23%, 11.35%, and 17.28% in warrant. Investors can't help asking: How long will the warrant speculation continue?
As the saying goes, until we reach the Yellow River, we will never die. The curtain call of Baosteel's warrants finally made the market understand the original form of warrants. August 31 was the exercise date of Baosteel's warrants. On that day, G Baosteel's trend was still turbulent, with a slight drop of 0.72% to close at 4.14 yuan, and the whole day fluctuation was only 0.04 yuan. The exercise price was 4.2 yuan, and the stock price of G Baosteel on the day of exercise was lower than 4.2 yuan. The final value of Baosteel warrants can be imagined. In addition, according to the exercise results of Baosteel warrants released by Baosteel Group, out of 387.7 million warrants, only 5542559 were successfully exercised, and the exercise ratio was only 1.43%.
It is obvious that Baosteel Warrants have finally become the "graveyard" of retail investors. According to a statistical data, there were more than 40000 accounts that eventually held Baosteel warrants after the market closed on August 23, the vast majority of which were individual investors and only dozens of institutional investors. In all accounts, the maximum number of shares held is only 6 million, and the market value does not exceed 200000 yuan. Market insiders said that the previously hyped large funds had been shipped successively before the curtain call of Baosteel's warrants. By the time the trading of Baosteel's warrants stopped, most of the warrants held by the large funds had been sold. As for the retail investors who are trapped in the "graveyard" and difficult to save themselves, one is too speculative, and the other is wrong operation without knowing the risk of warrants.
Vanke warrants also ended badly, with the exercise period from August 29 to September 4 Vanke A The lowest price in the session is 6.64 yuan. If the exercise is based on this price, it is equivalent to selling Vanke A shares at 3.638 yuan per share shares , the direct loss per share will be 3.002 yuan. In the end, a few warrant investors failed to understand the true meaning of put warrants, and the blind exercise of 15953 warrants resulted in an investment loss of about 50000 yuan.
Warrants have become a highly speculative tool, pushing retail investors into the "graveyard", which should have prompted the management to reflect on the problems in warrant speculation, so that the overheating of warrants and the overall market can be "cooled". However, there was another voice in the market. Liu Xiaodong, Deputy General Manager of Shanghai Stock Exchange, said that Baosteel's warrants were generally successful. In view of the view that "no exercise of warrants is equal to a piece of waste paper, and warrants will have a 'bloodletting' effect on the stock market", Liu Xiaodong specifically pointed out that "facts have proved that these views are incorrect."
So, does the fact prove that the warrant is a piece of waste paper? For investors, at least Baosteel Warrants and Vanke Warrants are "waste paper". As for Liu Xiaodong's opinion, "even if the warrant is not right, it does not mean that the warrant itself is a piece of waste paper." Such an evaluation is difficult for investors who have suffered losses to accept. To put it another way, Baosteel Warrant is certainly not a piece of waste paper Non tradable shares He has made great contributions to the reform and is a major shareholder of G Baosteel and G Vanke. The reason why warrants "return to the Jianghu" is because of the need of the so-called split share structure reform, which is one of the consideration for the share reform of listed companies. Warrant issuers can not only pay the cost of share reform at zero consideration, but also enjoy the benefits of full circulation without effort. To put it bluntly, warrants have become an expedient measure to help major shareholders who pay little or no consideration to muddle through the stock reform, but they have been encouraged and supported by the management. Most warrants themselves do not have real value, but because of the speculative characteristics, plus the T+0 that is intentionally provided for them and the "boost" of easing the price limit, the speculative value has become a rare commodity. In the stock market, these are almost "public secrets known by all people on earth". Before the launch of Baosteel warrants, Liu Xiaodong publicly said that "Baosteel warrants are not allowed to fail, and the Exchange will use all resources to fully cooperate with the smooth listing of Baosteel warrants". There is such a passage before that, Liu Xiaodong's "conclusion" on Baosteel Warrants now inevitably leads to more associations.
Is the warrant good or bad? The responsibility of regulators is not simple, not just "escort" the listing of warrants. As pointed out by market participants, "The 'doomsday round' hype is so crazy, is the bluff supervision still worthy of the responsibility of regulators, and also worthy of their own conscience?" Does warrants constitute a capital diversion for the stock market or promote the activity of the stock market?
Since the beginning of warrants, research institutions and market participants have warned that steel warrants may become a waste paper, and warned individual investors to participate cautiously. As a result, retail investors have become the main victims. Maybe some experts will put forward better suggestions on how to develop the warrant market in the next step, because there is an argument among regulators that "the creation of warrants will bring demand for stocks, and the role of warrants in the stock market is positive." Under such positive affirmation, I wonder how the institutions that dominate the speculation of warrants will make full use of the power of the "Shangfang Sword"? How many retail investors are confused again?
