OREANDA-NEWS. Hong Kong Exchanges and Clearing Limited (HKEx) has announced the arrangements for the adjustment to China Hongqiao Group Ltd (China Hongqiao) futures to account for China Hongqiao's rights issue.

Overview 

Company (Stock Code)

China Hongqiao (1378)

Corporate Action

7 Rights Shares for every 50 Shares held

Subscription Price

$4.31

Ex-date

14 January 2016

Highlights of the adjustment arrangements are set forth below. Investors should consult their brokers for further details, or if they have any questions regarding the adjustment.

China Hongqiao Futures

Trading Arrangements

The trading arrangements for the existing China Hongqiao futures under trading symbol CHQ will be as follows:

1.

Adjustment and Transfer of Outstanding Positions

Open positions of China Hongqiao futures series under trading symbol CHQ which exist after the market close on the business day immediately before the ex-rights date will be adjusted and transferred to stock futures series under trading symbol CHB.
 
2.

Introduction of New Stock Futures Series for Trading

On the ex-rights date, new China Hongqiao futures series based on the standard contract multiplier will be introduced for trading under the standard trading symbol CHQ.

Details of the adjustment procedures for China Hongqiao futures series under trading symbol CHQ are as follows: 

Adjustment Ratio (AR)

50 existing Shares + (7 New Shares x $4.31 / $S^)
50 existing Shares + 7 New Shares

Rounded to the nearest
4 decimal places.
Adjustment will only be made if the AR is smaller than 1.

Adjusted Contracted Price (ACP)

Contracted price of outstanding stock futures series x AR

Rounded to the nearest 2 decimal places

Adjusted Contract Multiplier (ACM)

Contracted price of outstanding stock futures series x (10,000 shares / ACP)

Rounded to the nearest 4 decimal places

Where $4.31 is the Subscription Price for the New Share and $S^ is the underlying stock closing price on 13 January 2016 (the business day immediately before the ex-rights date). 

Adjusted

CHB

ACM

From ex-rights date to
29 September 2016

No

Standard

CHQ

10,000

From ex-rights date onwards

Yes

Investors should note that the adjusted and standard stock futures series will have different contract multipliers.  There will not be any changes to the number of open positions and other contract terms after the transfer of positions.