Our reporter Xu Zhihong
As of January 25, 2008, the securities companies had earned a book profit of about 20.1 billion yuan in the creation of China Southern Airlines warrants.
But since February, the situation has changed.
Qilu Securities has created 7 million shares since January 23 Southern airlines After the (600029. SH) put warrant - China Southern Airlines JTP1 (580989), no securities firm participated in its creation. Instead, include citic securities Seven securities firms including (600030. SH), GF Securities, Everbright Securities, Guoyuan Securities (000728. SZ) began to buy back and cancel China Southern JTP1.
As a result, China Southern JTP1 shifted from net creation to net repurchase.
On March 10, GF Securities and Everbright Securities cancelled 50 million and 54 million put warrants of China Southern Airlines respectively; On March 3, CITIC Securities cancelled 200 million copies; On February 18, 15 million copies of Western Securities were cancelled; On January 25, 10 million copies of Ping An Securities and 30 million copies of Hongta Securities were cancelled respectively; On January 24, 32 million copies of Guoyuan Securities were cancelled. Since January 24, the above seven brokers have repurchased and cancelled 391 million copies of China Southern JTP1.
Since the theoretical value of China Southern Airlines JTP1 is zero, the warrant will be a piece of waste paper when it expires, and the securities companies can not perform the obligation of repurchase and cancellation. What are the reasons for the cancellation of collective repurchase by 7 securities companies?
Crisis of positive stock plummeting
As of January 25, 2008, 26 securities companies had created a total of 1214.8 million warrants. After the large-scale cancellation of securities companies, as of March 19, there were 823.8 million warrants in the hands of securities companies.
Before the Spring Festival, there was a heated debate in the industry about whether it was reasonable for securities companies to create warrants.
Guo Yong, assistant to the general manager of GF Securities, believes that the trading process of securities firm Chuangye is exactly the opposite to that of investors. Chuangye is to sell first and then buy back. On the surface, if it is to sell high and buy low, then the Chuangye business will be profitable, but in fact it is not that simple. The creation of warrants is definitely not a business of profit or loss. Whether it is the creation of call warrants or put warrants, the rise of stock price is beneficial to securities companies, and the creation risk occurs when the stock price falls.
A market person believed that in the creation business of the past two years, in fact, securities companies have made profits. The first reason is because of the bull market, the second reason is that the market is highly speculative, and the warrant premium is high, so the insurance coefficient of the creation business is high.
"The creation of put warrants by securities companies is equivalent to fully exposing the risk because it is not possible to hedge by shorting for the time being. If the positive shares fall significantly, the intrinsic value of the warrants rises higher than the price of the sold warrants, then the securities companies will experience actual losses." Guo Yong believes.
"The current situation is that the securities companies are facing a dilemma. Repurchase cancellation requires a lot of costs. Without repurchase cancellation, they cannot grasp the future trend of China Southern Airlines." One warrant investor believes.
The initial exercise price of China Southern Airlines JTP1 was 7.43 yuan, the exercise ratio was 2:1, the termination date was June 20, 2008, and the settlement method was cash payment system.
Since the listing of China Southern Airlines' warrants, the price of its regular shares of China Southern Airlines has always been higher than the initial exercise price of China Southern Airlines' warrants of 7.43 yuan. On September 20, 2007, it reached a high point of 30.50 yuan. Therefore, in theory, China Southern Airlines' warrants are a piece of waste paper, without exercise value.
However, from the beginning of 2008 to March 18, China Southern Airlines sank all the way, down 53.54%. From the high of 28.68 yuan at the beginning of the year to 12.98 yuan on March 18, the lowest was 12.59 yuan - just a few yuan away from the exercise price of 7.43 yuan. The original worthless warrant of China Southern Airlines began to highlight its value with the adjustment of the general trend.
However, some investors believe that the expiration date of China Southern Airlines warrants is still quite some time away, and they believe that the stock market will recover in the near future.
Another possibility
"If China Southern Airlines continues to fall below the exercise price, the securities companies participating in the creation will face losses." A market person said, but it cannot be ruled out that some securities companies lack liquidity and cancel warrants.
Since the creation of a securities firm needs to deposit cash in full in the special fund account for performance guarantee opened by CSDCC Shanghai Branch for exercise performance guarantee, each creation of a China Southern Airlines warrant requires a performance guarantee of 3.715 yuan. Statistics show that, based on the 12148 million warrants currently in circulation in the market, securities companies need to pay a total of 45129820000 yuan of performance guarantee.
The industry also believes that there is another possibility for securities companies to stop the creation of China Southern warrants.
"Since January, many investors of China Southern Airlines warrants have suffered serious losses, so the blame is placed on the creation of securities companies. This opinion caused widespread repercussions in the market at that time. This fierce debate about whether the creation of securities companies is reasonable may have affected the management, which may have controlled the creation of securities companies." An insider speculated.
After the listing of China Southern Airlines' warrants, the highest price reached 2.063 yuan. Since then, it has not exceeded this high point, but has fallen all the way. At the beginning of this year, it hovered above 0.3 yuan at the lowest point, and a large number of warrant holders have been locked up.
However, when the reporter asked insiders of many securities companies, they said that they had not heard of the statement that the management controlled the creation of warrants.
"Due to the creation of a large number of warrants, the supply of China Southern Airlines warrants is huge, so its investment and volatility are far lower than other warrants." A securities trader said, it can be seen that the creation mechanism has its advantages, which cannot be denied. The creation of a mechanism can make up for the shortcomings of the insufficient number of single warrants issued and the vulnerability to market speculation, and to a certain extent, it is conducive to the balance of market supply and demand.
