BJCORP JB
10 May 2011
Conversion 0.78
2:1
Example:
0.78 + 2 * 0.22 = 1.22
Mother closing = 1.21
While CBLC bears similarities to call warrants, its main features are a Mandatory Call Event (MCE) and the fact that settlement is only done in cash.
A MCE is the issuers' right to call the CBBC, which leads to the suspension of the CBBC, should it reach the call price, prior to the expire date of the certificates.
For CBLCs, the call price is either at or above the exercise price of the underlying instrument.
If the call price or level is equal to the exercise price, investors will not receive any cash amount. If the call price/level is different from the exercise price, cash settlement will be done based on an established formula.
What is Callable Bull/Bear Certificate ("CBBC")
When is it launching?
FAQ. frequent ask questions
Warrant, structured, instrument
______________________
Callable Bull/Bear Certificate ("CBBC")
On 1 June 2010, Issuer A issues 100 million of callable bull certificates based on PLC X's shares listed on Bursa Securities. The certificates have the following features:
.
Call Price : RM1.50
Exercise Price : RM1.00
Expiry Date : 30 Dec 2010
.
On 2 August 2010, the transacted prices of PLC X's shares as at 10.30
a.m. are as follows:
9.00am RM1.60
9.20am RM1.70
9.30am RM1.40
10.00am RM1.70
10.30am RM1.50
.
(a) When does the MCE1 for the callable bull certificates occur?
The MCE for the callable bull certificates occurs at 9.30 a.m. on 2 August 2010, when the transacted price is RM1.40, which is below the call price.
(b) What happens to the callable bull certificate when a MCE occurs?
When a MCE occurs, the certificates will be called and terminated by Issuer A immediately.
.
_______________________________________
.
On 1 June 2010, Issuer B issues 100 million of callable bull certificates based on PLC X's shares listed on Bursa Securities. The certificates have the following call and exercise price:
Call Price : RM1.00
Exercise Price : RM1.00
.
Will the callable bull certificate holders receive any cash amount if a MCE occurs?
No. As stipulated in paragraph 5.25A(1)(a) of the Main LR, where the call price of a CBBC is equal to its exercise price, the certificate holder will not receive any cash amount if a MCE occurs.
.
____________________________________________
.
What happens to the callable bull certificate when a MCE occurs?
When a MCE occurs, the certificates will be called and terminated by Issuer A immediately.
.
If a MCE occurs, will the CBBC be terminated at the time when the trading of the CBBC is suspended or when the MCE occurs?
Pursuant to paragraph 5.17A(1) of the Main LR, if a MCE occurs, a CBBC will be terminated at the time when its trading is suspended.
Example
If a MCE occurs at 10 a.m. and the suspension is effected at 10.01 a.m., the CBBC will be
terminated when it is suspended at 10.01 a.m.. All trades effected until the suspension are valid.
.
__________________________________
What is "MCE" or "mandatory call event"?
Is defined in paragraph 5.02 as the first occurrence at any time before the certificate's expiry date
where the transacted price of the underlying financial instrument is -
(a) at or below (in respect of a callable bull certificate); or
(b) at or above (in respect of a callable bear certificate)
the call price and upon which the callable bull/bear certificate will be called by the issuer.
.
________________________________
For the purpose of the lowest/highest traded price during the Main Trading Phase, the opening and closing prices are not taken into account. The lowest/highest traded price during the continuous trading
phases is regarded as the lowest/highest traded price for settlement purpose.
.
Note: The requirement that only the lowest/highest traded price that occurs during the "Main Trading Phase" can be taken into account in computing the settlement price of a CBBC, is only applicable when the
underlying financial instrument is shares or exchange traded funds listed on the Exchange.
.
Callable bull- use Lowest price
Callable bear- use Highest price
FAQ. frequent ask questions
Warrant, structured, instrument
______________________
Callable Bull/Bear Certificate ("CBBC")
On 1 June 2010, Issuer A issues 100 million of callable bull certificates based on PLC X's shares listed on Bursa Securities. The certificates have the following features:
.
Call Price : RM1.50
Exercise Price : RM1.00
Expiry Date : 30 Dec 2010
.
On 2 August 2010, the transacted prices of PLC X's shares as at 10.30
a.m. are as follows:
9.00am RM1.60
9.20am RM1.70
9.30am RM1.40
10.00am RM1.70
10.30am RM1.50
.
(a) When does the MCE1 for the callable bull certificates occur?
The MCE for the callable bull certificates occurs at 9.30 a.m. on 2 August 2010, when the transacted price is RM1.40, which is below the call price.
(b) What happens to the callable bull certificate when a MCE occurs?
When a MCE occurs, the certificates will be called and terminated by Issuer A immediately.
.
_______________________________________
.
On 1 June 2010, Issuer B issues 100 million of callable bull certificates based on PLC X's shares listed on Bursa Securities. The certificates have the following call and exercise price:
Call Price : RM1.00
Exercise Price : RM1.00
.
Will the callable bull certificate holders receive any cash amount if a MCE occurs?
No. As stipulated in paragraph 5.25A(1)(a) of the Main LR, where the call price of a CBBC is equal to its exercise price, the certificate holder will not receive any cash amount if a MCE occurs.
.
____________________________________________
.
What happens to the callable bull certificate when a MCE occurs?
When a MCE occurs, the certificates will be called and terminated by Issuer A immediately.
.
If a MCE occurs, will the CBBC be terminated at the time when the trading of the CBBC is suspended or when the MCE occurs?
Pursuant to paragraph 5.17A(1) of the Main LR, if a MCE occurs, a CBBC will be terminated at the time when its trading is suspended.
Example
If a MCE occurs at 10 a.m. and the suspension is effected at 10.01 a.m., the CBBC will be
terminated when it is suspended at 10.01 a.m.. All trades effected until the suspension are valid.
.
__________________________________
What is "MCE" or "mandatory call event"?
Is defined in paragraph 5.02 as the first occurrence at any time before the certificate's expiry date
where the transacted price of the underlying financial instrument is -
(a) at or below (in respect of a callable bull certificate); or
(b) at or above (in respect of a callable bear certificate)
the call price and upon which the callable bull/bear certificate will be called by the issuer.
.
________________________________
For the purpose of the lowest/highest traded price during the Main Trading Phase, the opening and closing prices are not taken into account. The lowest/highest traded price during the continuous trading
phases is regarded as the lowest/highest traded price for settlement purpose.
.
Note: The requirement that only the lowest/highest traded price that occurs during the "Main Trading Phase" can be taken into account in computing the settlement price of a CBBC, is only applicable when the
underlying financial instrument is shares or exchange traded funds listed on the Exchange.
.
Callable bull- use Lowest price
Callable bear- use Highest price