China's brokerages plan to list the country's first covered warrants, on Wuhan Iron and Steel Co, on Monday, a move that Beijing encouraged to spur markets and offer cash-strapped securities houses a new income source.
Ten brokerages, including largest listed broker CITIC Securities Co Ltd and second-largest Guotai Junan, said on Saturday they would list 1.127 billion put warrants collectively covering the country's third-largest steel mill.
Until this year, warrants - a kind of option that gives the holder the right but not the obligation to buy or sell an asset such as a stock at a fixed price on or before an expiry date - had not been seen in China since 1996.
Their revival is proceeding slowly - analysts had estimated that warrants covering up to 40 firms would be issued by year's end, versus just two at present.
"We've secured approval from the Shanghai stock exchange to issue warrants on Wuhan Steel, and procedures have been completed," CITIC said in a brief statement, adding it had won the go-ahead to create and issue 100 million put warrants. Baoshan Iron and Steel Co Ltd issued China's first warrants in a decade in August, to add depth to fledgling securities markets and - as gifts to shareholders - spice up listed firm's unpopular efforts to make state shares tradeable on bourses.