Morgan Stanley launches $18m warrants on RI index

Morgan Stanley launches $18m warrants on RI index

HONG KONG (Reuter): Global securities firm Morgan Stanley Group Inc said it had launched 200 million warrants worth about US$18 million on the MSCI Indonesia Index.

The warrants were issued in two tranches, with one and two year maturities respectively, it said in a statement issued in Hong Kong.

Issue prices were 7.5 U.S. cents for the one-year tranche and 10.56 U.S. cents for the two-year tranche. The warrants will mature on Jan. 24, 1997 and Jan. 23, 1998 respectively.

Each warrant represents one unit of the MSCI Indonesia index in Rupiah crossed into U.S. dollar at spot forex rates.

The strike price is 31.09 U.S. cents, set about 10 percent in the money. The warrants are American style and are exercisable for cash settlement at any time from listing to maturity.

The statement said application would be made for the warrants to be listed on the Luxembourg Stock Exchange with a minimum trading and exercise size of 10,000 warrants. Settlement will be made in Euroclear and Cedel; the settlement date is Feb. 21, 1996. Dealing is expected to start on the following day.

The one-year tranche warrants carry an all-in premium of 11.7 percent and gearing of 4.6 times; the two-year tranche warrants carry an all-in premium of 20.6 percent and gearing of 3.3 times.

Morgan Stanley & Co International Ltd acted as lead manager for the issue.

"We anticipate particularly strong performance in the Indonesian stock market this year, and we were very pleased to see broad demand from Asia and Europe for these warrants," Julian Bell, vice president of Morgan Stanley Asia Ltd, said in the statement.

"There are very few Indonesian equity warrants in existence and investors responded well to the opportunity to purchase leveraged exposure to the market," he added.