Supplemental Listing Document for Warrant code 3959, 3960, 3961, 3962, 3963 & 6005 issued by Bank of China (Hong Kong) LimitedThis document includes particulars given in compliance with the Rules Governing the Listing of Securities on the Stock Exchange of Hong Kong Limited (the “Listing Rules”) and is published for the purpose of giving information with regard to us and obtaining a listing of the Warrants on the Stock Exchange. We accept full responsibility for the accuracy of the information contained in the Listing Documents (as defined below) and confirm, having made all reasonable enquiries, that to the best of our knowledge and belief there are no other facts the omission of which would make any statement in such Listing Documents misleading. Investors are warned that the price of the Warrants may fall in value as rapidly as it may rise and holders may sustain a total loss of their investment. Prospective purchasers should therefore ensure that they understand the nature of the Warrants and carefully study the risk factors set out in this document and, where necessary, seek professional advice, before they invest in the Warrants. The Warrants constitute our general unsecured contractual obligations and of no other person and will rank equally among themselves and with all our other unsecured obligations (save for those obligations preferred by law) upon liquidation. If you purchase the Warrants, you are relying upon our creditworthiness and have no rights under the Warrants against the Company. Supplemental Listing Document for Warrants issued by Bank of China (Hong Kong) Limited (incorporated with limited liability in Hong Kong) Key terms Warrants Series 1 Series 2 Series 3 Series 4 Series 5 Stock Code 3959 3960 3961 3962 3963 Issue size 180,000,000 Warrants 77,000,000 Warrants 138,000,000 Warrants 35,000,000 Warrants 125,000,000 Warrants Style (for all series) European style cash settled Type Call Call Call Call Call Company Bank of Communications Co., Ltd. China Merchants Bank Co., Ltd. China Mobile Limited HSBC Holdings plc PetroChina Company Limited Shares Existing issued ordinary H shares of RMB1.00 each Existing issued ordinary H shares of RMB1.00 each Existing issued ordinary shares of HK$0.10 each Existing issued ordinary shares of US$0.50 each Existing issued ordinary H shares of RMB1.00 each Board Lot 10,000 Warrants 5,000 Warrants 50,000 Warrants 4,000 Warrants 20,000 Warrants Issue Price per Warrant HK$0.328 HK$0.770 HK$0.428 HK$1.720 HK$0.472 Exercise Price HK$12.800 HK$38.000 HK$138.000 HK$138.000 HK$18.000 Entitlement (for all series) One Share, subject to adjustment in accordance with Product Condition 2 Number of Warrants per Entitlement 10 Warrants 10 Warrants 100 Warrants 10 Warrants 10 Warrants Cash Settlement Amount per Board Lot (if any) payable at expiry (for all series) Entitlement x (Average Price - Exercise Price) x one Board Lot Number of Warrants per Entitlement Average Price (for all series) The arithmetic mean of the closing prices of one Share for each of the 5 Valuation Dates subject to our right to determine the closing price in good faith in certain circumstances upon the occurrence of a Market Disruption Event, as described further in the Product Conditions. Maximum number of Shares to which the Warrants relate 18,000,000 Shares 7,700,000 Shares 1,380,000 Shares 3,500,000 Shares 12,500,000 Shares Launch Date (for all series) 30 October 2007 Issue Date (for all series) 5 November 2007 Listing date (for all series) Expected to be 6 November 2007 (“Dealing Commencement Date”) Valuation Date (for all series) Each of the five business days immediately preceding the Expiry Date subject to any potential postponement upon the occurrence of a Market Disruption Event, provided that no Valuation Date can fall on or after the Expiry Date, as described further in the Product Conditions. Expiry Date 2 June 2008 2 June 2008 1 August 2008 1 August 2008 2 June 2008 If such day is not a business day in Hong Kong, the immediately succeeding business day. You must read the above together with our base listing document dated 30 April 2007, in particular, the sections headed “General Conditions of Structured Products” (“General Conditions”) and “Product Conditions of Cash Settled Warrants over Single Equities” (“Product Conditions”) set out in Appendix 1 and Part A of Appendix 2 respectively. 5 November 2007 2 IMPORTANT INFORMATION What is this document about? This document is for information purposes only and does not constitute an offer, an advertisement or invitation to the public to subscribe for or to acquire the Warrants. It is possible that there may have been dealings in the Warrants since the Launch Date. What documents should you read before investing in the Warrants? You must read this document together with our base listing document dated 30 April 2007 (our “base listing document”) (as supplemented by the addendum dated 5 November 2007 (our “addendum”) and any other addenda to be issued from time to time) (together, the “Listing Documents”). The Listing Documents are accurate as at the date of this document. You should carefully study the risk factors set out in the Listing Documents. What are our credit ratings? Our ratings are: Rating agency Rating as of the Launch Date Fitch Ratings A and F1 for long-term foreign currency issuer default rating and short-term foreign currency issuer default rating Moody’s Investor Service Aa3 and P-1 for long-term and short-term foreign currency bank deposit ratings Standard & Poor’s A- and A-2 for long term and short-term counterparty credit ratings Are we regulated by any bodies referred to in Rule 15A.13(2) or (3) of the Listing Rules? We are a licensed bank regulated by the Hong Kong Monetary Authority. Are we subject to any litigation? Save as disclosed in the Listing Documents, we and our subsidiaries are not aware of any litigation or claims of material importance pending or threatened against us or them. Authorisation for the issue of the Warrants Our management, pursuant to the authority delegated by our board of directors, authorised the issue of derivative warrants on 1 March 2007. Has our financial position changed since last financial year- end? There has been no material adverse change in our financial or trading position since 31 December 2006. Do you need to pay any transaction cost? 005 per cent. and the Securities and Futures Commission charges a transaction levy of 0.004 per cent. in respect of each transaction effected on the Stock Exchange payable by each of the seller and the buyer and calculated on the value of the consideration for the Warrants. The levy for the investor compensation fund is currently suspended. You do not need to pay any stamp duty in respect of the Warrants. Where can you inspect the relevant documents? The following documents are available for inspection during usual business hours on any weekday (holidays excepted) until the Expiry Date at out offices at 8th Floor, Bank of China Tower, 1 Garden Road, Hong Kong: (a) our audited consolidated financial statements for the year ended 31 December 2006 and our unaudited condensed interim financial statements for the six months ended 30 June 2007; (b) consent letters of PricewaterhouseCoopers for the Listing Documents; (c) each of the Listing Documents (in separate English and Chinese versions); and (d) the Instrument executed by us on 13 March 2007. The Listing Documents are also available on the website of the Stock Exchange at www.hkex.com.hk. 各上市文件亦可於聯交所網站 (www.hkex.com.hk) 瀏覽。 Has PricewaterhouseCoopers consented to the inclusion of its reports to the Listing Documents? PricewaterhouseCoopers has given and has not withdrawn its written consent to the inclusion of its auditor’s report dated 22 March 2007 on our audited consolidated financial statements for the year ended 31 December 2006 in the base listing document and its review report dated 23 August 2007 on our unaudited condensed interim financial statements for the six months ended 30 June 2007 in the addendum and/or the references to its name in the Listing Documents, in the form and context in which they are included. Its reports were not prepared for incorporation into the base listing document and/or the addendum. PricewaterhouseCoopers does not hold our shares or shares in our subsidiaries, nor does it have the right (whether legally enforceable or not) to subscribe for or to nominate persons to subscribe for our securities or securities of any of our subsidiaries. Selling restrictions The offer or transfer of the Warrants is subject to the selling restrictions specified in our base listing document. How can you get information about us? The section headed “Description of the Issuer” in our base listing document (as supplemented by the Addendum) contains further information about us. You may also visit www.bochk.com to obtain information about us. Capitalised terms and inconsistency Unless otherwise specified, capitalised terms used in this document have the meanings set out in the General Conditions and/or the Product Conditions. Terms used in this document apply to each series of Warrants described on the cover page. If this document is inconsistent with our base listing document, this document prevails. Supplemental Information relating to us A press release entitled “BOC Hong Kong (Holdings) Announced Certain Unaudited Financial Data for the Third Quarter of 2007” was published on 30 October 2007. A copy of that press release is available at our website at: http://www.bochk.com/web/about/press_release/press_release .xml?section=about&level_2=press_release&fldr_id=84. 3 OVERVIEW OF WARRANTS What is a derivative warrant? A derivative warrant is an instrument which gives the holder a right to “buy” or “sell” an underlying asset at a pre-set price called the exercise price on the expiry date. Investing in the warrants does not give you a right in the underlying asset. Derivative warrants usually cost a fraction of the price of the underlying asset and may provide leveraged return to you (but conversely, it could also magnify your losses). How and when can you get back your investment? The Warrants are European style cash settled derivative warrants linked to the Shares. European style warrants can only be exercised on the expiry date. The Warrants will be automatically exercised on the Expiry Date, entitling the holder to a cash amount called the “Cash Settlement Amount” (if positive) according to the terms and conditions in the Listing Documents. You will receive the Cash Settlement Amount less any Exercise Expenses at expiry. If the Cash Settlement Amount is equal to or less than the Exercise Expenses, the Warrants will expire worthless on the Expiry Date. How do the Warrants work? The potential payoff at expiry for the Warrants is calculated by us by reference to the difference between the Exercise Price and the Average Price of the underlying Share. A call Warrant is suitable for an investor holding a bullish view of the price of the underlying Share during the term of the Warrant. A call Warrant will be exercised if the Average Price of the underlying Share is greater than its Exercise Price. The more the Average Price is above the Exercise Price, the higher the payoff at expiry. If the Average Price is at or below the Exercise Price, the investor in the call Warrant will lose all of his investment. What are the factors determining the price of a derivative warrant? The price of a warrant generally depends on the price of the underlying share. However, throughout the term of the warrants, their price will be influenced by a number of factors, including: • the prevailing price of the underlying share and the exercise price of the warrants; • the volatility of the price of the underlying share (being a measure of the fluctuation in the price of the underlying share); • the time remaining to expiry: a warrant is generally more valuable the longer the remaining life of the warrants; • interest rates; • expected dividend payments or other distribution on the underlying share; • the supply and demand for the warrants; and • our creditworthiness. What is your maximum loss? The maximum loss in warrants will be limited to your investment amount plus any transaction costs. Can you sell the Warrants before maturity? Yes. We have made an application for listing of, and permission to deal in, the Warrants on the Stock Exchange. All necessary arrangements have been made to enable the Warrants to be admitted into the Central Clearing and Settlement System (“CCASS”). Issue of the Warrants is conditional upon listing being granted. From the Dealing Commencement Date, you may sell or buy the Warrants on the Stock Exchange. The Liquidity Provider will make a market in the Warrants by providing bid and/or sell prices. See “Liquidity” on page 4 for further information. How can you get information about the Shares? You may obtain information on the Shares (including the Company’s financial reports) by visiting the Stock Exchange website at www.hkex.com.hk or the relevant Company’s website at: Company website Bank of Communications Co., Ltd. www.bankcomm.com China Merchants Bank Co., Ltd. www.cmbchina.com China Mobile Limited www.chinamobileltd.com HSBC Holdings plc www.hsbc.com PetroChina Company Limited www.petrochina.com.cn How can you get information about the Warrants after issue? You may visit the Stock Exchange website at www.hkex.com.hk to obtain information on the Warrants or any notice given by us or the Stock Exchange in relation to the Warrants. We have included references to websites in this document to indicate how further information may be obtained. Information appearing on those websites does not form part of the Listing Documents. You should conduct your own web searches to ensure that you are viewing the most up-to- date information. 4 ISSUE DETAILS, LIQUIDITY AND SETTLEMENT You must read this summary together with our base listing document, in particular, the General Conditions and the Product Conditions. Issue details Form of the Warrants Each series of the Warrants will be represented by a global certificate in the name of HKSCC Nominees Limited. We will not issue definitive certificates for the Warrants. You may arrange for your broker to hold the Warrants in a securities account on your behalf, or if you have a CCASS Investor Participant securities account, you may arrange for the Warrants to be held in such account. You will have to rely on the records of CCASS and/or the statements you receive from your brokers as evidence of your beneficial interest in the Warrants. Stock Exchange The Stock Exchange of Hong Kong Limited. No application has been made to list the Warrants on any other exchange. Liquidity Liquidity Provider Taifook Securities Company Limited (broker ID number 9605). The Liquidity Provider is not our affiliate. It is regulated by the Stock Exchange and the Securities and Futures Commission. It will act as our agent in providing quotes. Quotes You can request a quote by calling the Liquidity Provider at: telephone number: + 852 2801 2450. The Liquidity Provider will respond within 10 minutes and the quote will be displayed on the Stock Exchange’s designated stock page for the Warrants. Maximum spread between bid and offer prices 10 ticks. Factors for determining the bid and offer prices The Liquidity Provider will consider factors, including, without limitation, the prevailing market price of the Shares, the price volatility of the Shares, prevailing interest rates, the time left to the expiry of the Warrants, the dividend yield of the Shares and the Exercise Price of the Warrants. Minimum quantity for which liquidity will be provided 10 Board Lots Circumstances under which the Liquidity Provider may not be able to, and shall not be obliged to, provide liquidity (i) during the first five minutes of each morning trading session or the first five minutes after trading commences for the first time; (ii) when the Warrants or the underlying Shares are suspended from trading for any reason; (iii) when there are no Warrants available for market making, in which event, only a bid price will be available. Warrants held by us or any of our affiliates in a fiduciary or agency capacity are not Warrants available for market making; (iv) during the 5 business days immediately preceding (and including) the Expiry Date; (v) when operational and technical problems affecting the market making activities arise; (vi) if the stock market experiences exceptional price movement and volatility; (vii) if a market disruption event occurs; (viii) when the ability of the Liquidity Provider acting on our behalf to source a hedge or unwind an existing hedge is materially affected by the prevailing market condition; and (ix) if the theoretical value of the Warrants is less than HK$0.01. 5 Settlement Settlement date upon a transfer The Warrants may only be transferred in a Board Lot (or integral multiples thereof). Where a transfer of Warrants takes place on the Stock Exchange, settlement must currently be made not later than two trading days after the transfer date. Exercise The Warrants will be automatically exercised on the Expiry Date in integral multiples of the Board Lot if the Cash Settlement Amount is positive; otherwise, you will lose all of your investment. We will deliver the Cash Settlement Amount (if any) net of any Exercise Expenses to HKSCC Nominees Limited, which will then distribute such amount to the securities account of your broker or to your CCASS Investor Participant securities account (as the case may be). Exercise Expenses You are responsible for any Exercise Expenses. Exercise Expenses mean any charges or expenses including any taxes or duties which are incurred in respect of the exercise of the Warrants. If the Cash Settlement Amount is equal to or less than the Exercise Expenses, no amount is payable. Settlement Date upon automatic exercise at expiry Within 3 business days after the Expiry Date. 6 RISK FACTORS You must read these risk factors together with the risk factors set out in our base listing document. Warrants may expire worthless Although the cost of a Warrant may cost a fraction of the value of the underlying Share, the Warrant’s price may change more rapidly than the underlying Share. Unlike stocks, the Warrants have a limited life and will expire at the Expiry Date. In the worst case, the Warrants may expire with no value. The Warrants are only suitable for experienced investors who have a positive view on the performance of the underlying Share during the term of the Warrants and are willing to accept the risk that they may lose all their investment. The Warrants can be volatile Prices of the Warrants may rise or fall rapidly. You should carefully consider, among other things, the following factors before dealing in the Warrants: (i) the prevailing trading price of the Warrants; (ii) the value and volatility of the underlying Share; (iii) the time remaining to expiry; (iv) the probable range of the Cash Settlement Amount; (v) the interim interest rates and expected dividend payments on the underlying Share; (vi) the liquidity of the underlying Share; (vii) any related transaction cost; and (viii) our creditworthiness. Time decay The value of a Warrant is likely to decrease over time. Therefore, the Warrants should not be viewed as products for long term investments. There is no assurance that the value of the Warrants will correlate with movements of the underlying Share The value of the Warrants may not correspond with the movements in the underlying Share price. If you buy the Warrants with a view to hedge against your exposure to the underlying Share, it is possible that you could suffer loss in your investment in the underlying Share and the Warrants. The Listing Documents are not the sole basis for making an investment decision The Listing Documents do not take into account your investment objectives, financial situation or particular needs. Nothing in the Listing Documents should be construed as a recommendation by us or our affiliates to invest in the Warrants or the underlying Share. Possible limited secondary market The Liquidity Provider may be the only market participant for the Warrants and therefore the secondary market for the Warrants may be limited. The more limited the secondary market, the more difficult it may be for you to realise the value in the Warrants prior to expiry. Adjustment related risk The occurrence of certain events (including, without limitation, a rights issue or bonus issue by the Company, a subdivision or consolidation of the Shares and a restructuring event of the Company) may entitle us to adjust the terms and conditions of the Warrants. However, we are not obliged to adjust the terms and conditions of the Warrants for every event that affects the underlying Share. Any adjustment or decision not to make any adjustment may adversely affect the value of the Warrants. Please refer to Product Condition 2 for details about adjustments. Suspension of trading If trading in the underlying Share is suspended on the Stock Exchange, trading in the Warrants will be suspended for a similar period. Possible early termination The Warrants will be, amongst other events, terminated early in the event of liquidation of the Company. Conflict of interest We and our subsidiaries (“Group”) engages in commercial banking and other financial activities for our own account or the account of others. The Group, in connection with our other business activities, may possess or acquire material information about the underlying Shares. Such activities may involve or otherwise affect the Shares in a manner that may cause consequences adverse to you or otherwise create conflicts of interests in connection with our issue of the Warrants. Such actions and conflicts may include, without limitation, the purchase and sale of securities and exercise of creditor rights. The Group: (a) has no obligation to disclose such information about the Shares or such activities. The Group and our officers and directors may engage in any such activities without regard to the issue of the Warrants by us or the effect that such activities may directly or indirectly have on any Warrant; (b) may from time to time engage in transactions involving the Shares for our proprietary accounts and/or for accounts under our management and/or to hedge against the market risk associated with issuing the Warrants. Such transactions may have a positive or negative effect on the value of the Shares and consequently upon the value of the Warrants; (c) may from time to time act in other capacities with regard to the Warrants, such as in an agency capacity; and (d) may issue other derivative instruments in respect of the Shares and the introduction of such competing products into the market place may affect the value of the Warrants. Global registered form The Warrants are issued in global registered form and are held on your behalf within CCASS. You will not receive any definitive certificate and your name will not be registered in the register of the Warrants. You will have to rely on your broker and the statements you receive from it as evidence of your interest in the Warrants. PARTIES OUR OFFICE Bank of China (Hong Kong) Limited 14th Floor Bank of China Tower 1 Garden Road Hong Kong LEGAL ADVISORS AS TO HONG KONG LAW Mallesons Stephen Jaques 37th Floor Two International Finance Centre 8 Finance Street Central Hong Kong AUDITOR PricewaterhouseCoopers 22nd Floor Prince’s Building Central Hong Kong LIQUIDITY PROVIDER Taifook Securities Company Limited 25th Floor New World Tower 16-18 Queen’s Road Central Hong Kong |
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