Empirical Studies Of The Warrants On The Application Of Chinese Split Share Structure Reform

Warrants, as a financial derivative tool, has been widely applied in the international market, yet, it is still a brand-new topic,regarding its functions in the reform of non-tradable shares. Focused on the applications of the warrants, this thesis aims to reveal the significance and the prospects of the warrants in the undergoing reform of the non-tradable shares in China. Meanwhile, the thesis puts forward the policy improvement proposal and corresponding investment strategy, after a careful study of the existing problems through the comparison analysis on the successful experiences of Hongkong market.After a thorough analysis, this article draws a few conclusions. First, it gives an affirmative answer to the important role of warrants as the means of payment consideration in the process of the reforms of non-tradable shares in China. Secondly, from a long term, the warrants, as an innovative financial tool imported to China, will enjoy a great development in China, owing to its functions in improving China financial systems, building new profit mode, enriching investment products and bridging over China and international stock market systems.Meanwhile, the thesis points out that there are still quite a number of problems in the utilizing of warrants in our country. The problems include: the pricing of the warrant deviates from the standard B-S pricing model, its volatility ratio is higher than that of the international markets, resulting in over speculations. In view of these problems, this article puts forward the corresponding improvement proposals based on the research on the successful practices in Hongkong market. The first is to enrich the warrants investment varieties. The second is to better the warrants market functions. The third is to strengthen the corresponding systems, emphasizing the risk-control methods. Finally, more efforts have to be made to enhance the market transparency in order to have a healthy warrants market in our country.According to the unique characteristics of warrants in China market, this thesis also gives a very clear picture of the practical investment strategies.