Ping An Securities Derivatives Department Xue Pu
With the appearance of ZTE ZXC1 at its trading limit on Friday, several warrants separated from convertible bonds will be listed one after another in the near future. So, how should investors operate these newly listed warrants?
First of all, these warrants are warrants separated from convertible bonds of separate transactions, which are issued by listed companies for financing purposes, so they are all call warrants. When investing in such subscription certificates, investors are required to pay attention to the general market atmosphere and judge the expected trend of positive shares.
Secondly, the degree of popularity of these newly listed warrants is also related to the size of warrant circulation. For warrants with small circulation, they are more likely to be driven by large-scale funds in the market, resulting in a high premium.
Third, due to the factors of the warrant market and the characteristics of the warrants themselves, the warrants are generally sought after by investors at the initial stage of listing, resulting in a rapid rise in the premium rate of warrants. With the shortening of the residual maturity, its price will inevitably return to the true value gradually. Therefore, investors who are optimistic about the positive shares for a long time and want to buy new listed warrants to replace the positive shares may wish to actively participate after the warrant price returns to rationality.
Finally, and most importantly, we should carefully review the terms of warrants. The recently issued warrants are all near parity warrants. Compared with most long listed deep in price warrants, these warrants have higher effective leverage and undoubtedly have greater appeal.
