Guotai Jun'an and Guoxin Serve as Primary Traders of Baosteel Warrants

Our reporter Liu Yingfang Yushu is from Shanghai

Guotai Jun'an and Guosen Securities will act as the primary dealers of Baosteel warrants. Yesterday, the Shanghai Stock Exchange issued the Notice on Matters Related to the Listing of Baosteel Warrants (hereinafter referred to as the Notice) to all member units, which confirmed the ownership of the above primary dealers.

However, a series of issues, such as whether and when the reference price of Baosteel's warrants on the first day of listing will be announced, are still unclear.

Guotai Jun'an is the first company of Baosteel（ information quotation forum ）(600019. SH) The sponsor of the split share structure reform and Guosen Securities are once again lucky. The Notice clearly stipulates the responsibilities of primary dealers: primary dealers of warrants are mainly responsible for providing trading quotations to investors to maintain the liquidity of warrant transactions. Primary dealers engaged in the proprietary business of warrants and their underlying securities must go through the special seats and special accounts recorded in the SSE and be subject to the supervision of the SSE.

"Warrants are highly leveraged and high-risk products, and member companies should take adequate risk control measures in their proprietary or brokerage businesses." This is the first requirement of the Notice for members. It can be seen that the Shanghai Stock Exchange is cautious about the warrant products that "see the light again" after 19 years.

Baosteel warrant transaction is referred to as "Baosteel JTB1", the transaction code is "580000", the warrant exercise is referred to as "ES060830", and the exercise code is "582000".

The relevant person from the Shanghai Stock Exchange told the First Financial Daily that when the warrant product was launched, the Exchange considered more risk prevention to prevent excessive speculation and manipulation of stock prices. The first warrant in China's securities market was the Dafeile Allotment Warrant launched in Shanghai Stock Exchange in June 1992（ information quotation forum ）The company also sent the rights of allotment to the shareholders of tradable shares in the form of warrants. However, due to crazy speculation, the exercise price of Bao'an warrants was far higher than the stock price, which was theoretically worthless, and the warrants ended up without any problems. This is obviously not the result that the exchange would like to see.

Therefore, the Notice of SSE emphasizes that member units are required to fully publicize and educate investors, flexibly and effectively deliver and sign the warrant risk disclosure letter to investors, and effectively prevent and resolve the transaction and settlement risks of warrants. In addition, the Exchange requires member companies not to engage in market manipulation or insider trading and other illegal acts.

However, the Notice did not disclose more details about the reference price for the first day listing of Baosteel warrants. This reference price is the focus of investors' attention and has practical guiding significance for investors' operation.

The Announcement on Listing of Warrants of Shanghai Baosteel Group Corporation released yesterday only confirmed that "the reference price of warrants for opening on August 22, 2005 will be calculated by the issuer and submitted to the SSE, and the issuer will calculate the reference price for opening in accordance with the Black Scholes formula, where S is the closing price of Baosteel shares on August 19, 2005."

This means that the reference price will be announced after today's closing, but it is not clear when the reference price will be announced, whether it is tonight or before the opening of next Monday.

The relevant people of Guotai Jun'an told reporters that they were not clear about the relevant details.