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R4 SCMP REITs and Property Market Dec 1 2005

R4 SCMP REITs and Property Market Dec 1 2005 - Tuesday...

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Tuesday, January 17, 2006 South China Morning Post WARRANTS Volatile Link Reit restrains warrant issuers Only eight derivative products launched as against CCB's 24 -------------------------------------------------------------------------------- The unusually high volatility of the Link Reit has forced warrant issuers to alter plans to issue related derivative warrants, holding it back from breaking the record set by China Construction Bank Corp. Eight issuers launched just eight call warrants yesterday on the Link, which will list and debut on January 23, against the 24 warrants issued on China Construction Bank on its first day of warrant trading in November last year - a record for a single company. KBC Financial Products, a normally active issuer, did not launch any Link warrants yesterday. "To factor in the high volatility of the Link, issuers need to price the warrants at a high level. From this point of view, the Link may not be the most ideal underlying asset at this moment," director Venus Wong said. "We will wait and see and if there is strong investor demand on [Link warrants], we will surely consider joining the herd." The Link, regarded as a yield play, saw a drastic change in its fortunes after British hedge fund Children's Investment Fund Management snapped up an 18 per cent stake. Then becoming a growth play, it surged 45.6 per cent to yesterday's close of $15 since listing on the back of strong buying momentum.
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