Category: Money Tips Date: 2005-12-13
Stock reform of the price of the program appears to be growing preference for warrants, so far, five companies have programs (to be) issued six warrants, of which three warrants, put warrants 3. Relative to the warrants, I believe that better protection put warrants outstanding shares of shareholders. Because the warrants will only make the outstanding shares of shareholders in the stock price rose at a profit when the stock fell does not offer much benefit investors (such as Baosteel have already listed warrants, if not over-hype, the outstanding shares of the interests of shareholders will be subject to damage) ; while the issue of put warrants on the one hand shows the major shareholder confidence in the future stock prices, on the other hand, after the shares resume trading down, we also give the circulation a certain degree of compensation for shareholders.
Reform program in the delivery of the stock and warrants, neither can send it as is because the warrants with the resumption after the stock prices to changes in, nor that it can be easily transformed into Major Holders quantity, because it contains the future stock price expectations. So how to assess the share reform program that contains the C of E, how to seize the investment opportunities related to the stock? In my opinion, should be changed before and after the circulation of shares of stock interests of the shareholders will not be harmed as a standard, to identify the share reform after the stock break-even point. Specifically, for "Major Holders + warrant" option, break-even point can be to seek a solution of the following equation: P0 = (1 + m) P1 + nf (P1)
Where, P0 to change before the stock holding costs, m, n, respectively, each share of stock and warrants dispatch number, f (g) the theoretical value for the warrants (BS model is commonly used), P1 for the break-even point. There is no analytic solution of this equation can be used numerical method or trial and error to solve. Obtained after this breakeven point, combined with the company's fundamentals (such as price-earnings ratio, book value, etc.) and natural ex-dividend (not including warrants, the same below) prices, to determine whether the stock price after the share reform in the breakeven points. If the break-even point above, consider buying and holding.
According to the latest share reform program, we suspend the natural ex-dividend price price (China Yangtze Power share reform has been completed, but the unlisted warrants to Monday closing price of 7.3 yuan to replace) as the underlying asset prices, historical volatility, as implied volatility, corresponding to different parameters and models, the estimated value of the corresponding warrant. The results showed that Baosteel, long power, New Steel and Vanadium, Wuhan, China Vanke and other shareholders of the company's outstanding shares profit 0.81%, 5.30%, 10.73%, 6.35% and 7.55%. If stock prices fall and circulating shares of the break-even points were 4.18 yuan, 7 yuan, 2.92 yuan, 2.56 yuan and 3.18 yuan. As long as the share reform after the stock prices at or above the breakeven point, circulation shareholders is profit. And with the price increase, the higher the profits. As can be seen, New Steel and Vanadium, Wuhan, China Vanke shares of companies such as reform programs contained in the warrants have a high investment value of the stock before the completion of reform, investors may consider the suspension near the intervention price.
However, according to the Hong Kong warrants market, and Baoshan Iron and Steel warrants performance, warrant prices tend to be higher than its theoretical value. Studies have shown that Hong Kong warrants implied volatility is generally 1.5 times the historical volatility of about. In accordance with the historical volatility of 1.5 times the rate of flow of a more substantial shareholder profits, while the breakeven point is lower.
According to the efficient market hypothesis, in the semi-strong form efficient market, the Securities and current prices fully reflect all public information. We New Steel and Vanadium, for example, stock price reform program of the suspension before the release of 5.22 yuan, after resumption, according to Monday's closing price 5.84 yuan terms, rose 0.62 yuan, while the per share value of warrants can be obtained by 0.57 yuan, slightly less than the price gains, the share price rise seems to have the "power with" information has responded. However, if investors are according to the price of 5.84 yuan to buy the stock price change is completed by a natural ex-dividend basis, then the investors can still get 7.6% or more benefits. This shows that the stock still has some room to rise, the market share reform program with the C of E there is a "response to inadequate" rational investors should seize the investment opportunities in a timely manner.
