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UBS enters the Hong Kong warrants market

Hong Kong Media Releases APAC

UBS today officially launches its Hong Kong warrants offerings following a soft launch in August.

"UBS is committed to providing Hong Kong's retail investors with a full range of structured equity investments, of which warrants will be an indispensable tool. Additionally, retail investors can benefit from the competitive pricing of UBS warrants and the overall efficiency and scale of UBS's equity derivatives franchise," said Christopher F LEE, Head of Intermediary Risk Management Products (RMP) Sales at UBS.

"We expect the warrant market to flourish in the next 12 months due to growth in the universe of stocks eligible for warrant issuance. Eligible stocks now account for over 86% of the total market capitalization. The increasing transparency of warrant pricing and the tighter bid/ask spread will also attribute to the increasing turnover," said Johnny YU, a Director in the Risk Management Products team responsible for the warrants business.

"In addition, the anticipated listing of large-cap stocks and the issuance of warrants linked to these newly-listed stocks will continue to generate momentum and drive warrant turnover higher," he said.

Since the soft launch, UBS has issued 25 warrants in which, there has been healthy turnover. UBS plans to issue up to 80 warrants by the end of the year and to diversify into warrants linked to indices and other non-blue chip stocks.

UBS has established partnerships with local brokers - Hang Seng Bank, Tai Fook Securities, Phillip Securities, Sun Hung Kai Investment Services and CASH - to offer commission rebate schemes to investors.

UBS's Equity Risk Management Products team was placed first in all nine equity categories in Asiamoney's inaugural structured products poll last year and UBS was named Equity Derivatives House of the year in Asiamoney's structured products poll in 2004 and 2005. UBS was also voted Overall Best Provider in the Equity category. In addition, Asia Risk and The Asset named UBS Equity Derivatives House of the Year for 2004.

Hong Kong, 6 September 2005


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