Industry insiders: put warrants for share reform will become phased products

Liu Xiaodong, Deputy General Manager of Shanghai Stock Exchange, said that he would not carry out quota management in terms of creation

Jiangnan

The put warrants, which were born from the split share structure reform but have frequently caused disputes recently, may gradually fade out of the Shanghai and Shenzhen Stock Exchanges as phased products.

At the warrant seminar held by Shanghai Stock Exchange last Friday, the experts attending the seminar pointed out that put warrants played a key role in the reform of non tradable shares, but with the end of the share reform, such put warrants may become a phased product.

In the past two years, some listed companies with decentralized equity and relatively difficult share reform chose warrants as a means of payment of consideration, thus successfully solving the problem of share reform. such as China Merchants Bank (600036. SH), its largest shareholder, China Merchants Group, held only 17% of its shares before the share reform, which made it difficult to give out shares. Later, it adopted the scheme of giving out weighted certificates (6 warrants for 10 shares), which was approved by the shareholders of tradable shares.

However, the put warrants generated with the share reform, as the consideration freely distributed to the shareholders of tradable shares by the shareholders of non tradable shares, did not go through a market-oriented issuance process, lacked a supply and demand balance mechanism, and became the first choice for speculation under certain conditions. Therefore, the warrant creation mechanism has played an important role in curbing excessive speculation in the market and changing the imbalance between supply and demand of warrants.

With the hype of warrants since the end of May, in a few days from June 7 to June 12, CMB's put warrants with an intrinsic value of almost zero rose from 0.6 yuan to 3-4 yuan, significantly deviating from their intrinsic value. In this case, according to the relevant rules, qualified securities firms create a large number of warrants and sell them in the market. As of June 22, securities firms had created 3.789 billion CMB warrants.

At present, the explosive speculation of put warrants has brought huge speculative income to speculators and considerable creation income to securities companies. At the same time, it has also caused great losses to many individual investors who lack risk awareness and correct understanding of warrants. The market began to think about whether the put warrants, which had almost become waste paper, still had their significance after completing their historical mission of assisting the share reform.

Zhang Biao, General Manager of Guotai Junan Derivatives Department, said that in the absence of arbitrage mechanism, the price of a financial product is reasonable no matter where it is set. At present, the price of put warrants seriously deviates from its intrinsic value, which is the result of the lack of market arbitrage mechanism. In the case of stock index futures or ETFs, this value deviation will not occur because of the existence of the futures arbitrage mechanism.

Teng Tianming, executive vice general manager of Huaxia Fund Company, said that the speculation of put warrants also explained its phased characteristics from another aspect. Since the end of May this year, the number of warrants has been decreasing and the trading of warrants has been warming up again. As the market callback has brought some imagination space to the put warrants, the trading of the put warrants is extremely active. However, it can be seen from the market that the scarcity of put warrants for share reform is also an important reason for its popularity. With the end of share reform, new put warrants will be more difficult to appear, and existing varieties will gradually withdraw from the historical stage as the exercise expires.

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