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CIMB Investment unveils first Bull ELS warrant  

Wednesday, 20 February 2008

CIMB Investment unveils first Bull ELS warrant

KUALA LUMPUR: CIMB Investment Bank Bhd has launched Malaysia's first listed Bull equity-linked structure (Bull ELS), a short-term structured warrant allowing investors to purchase underlying shares at a discounted price.

CIMB Investment equity derivatives director Lim Jong Hau said the Bull ELS would be listed on the call warrants board of Bursa Malaysia and issued on shares of plantation giants Sime Darby Bhd and IOI Corp Bhd.

“We are focusing on stocks of Sime Darby and IOI Corp because there is a bullish sentiment on the plantation sectors at this point in time,” Lim told reporters at the launch of Bull ELS yesterday.

He said the warrants would be issued on up to 20 million shares each from Sime Darby and IOI Corp.

Lim Jong Hau
“The Bull ELS would be set at a 5% discount to the share price of Sime Darby and IOI Corp,” he said.

The exercise and subscription prices of the Bull ELS were determined at the close of the first trading session at 12.30pm yesterday and would be fixed during the entire duration of the offer, which expires on March 5.

According to Lim, investors' return at maturity would depend on the performance of the underlying shares at the expiry date of the Bull ELS.

“If the closing price of the shares is at or above the exercise price, investors would receive a cash settlement comprising their subscription amount with interest.

“However, if the closing price is below the exercise price, investors would receive the number of underlying shares equivalent to the number of Bull ELS held,” he added.

Shares in Sime Darby and IOI Corp closed at RM11.80 and RM7.30 at the end of the first session yesterday.

A CIMB statement said the exercise price of the Bull ELS for Sime Darby and IOI Corp was set at RM11.210 and RM6.935 respectively.

The subscription price was set at RM11.107 and RM6.858 respectively, representing a respective yield to maturity of 9.68% and 11.71%.

The Bull ELS is scheduled to be listed on Feb 14.

Source : Wednesday January 30, 2008

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