Merrill in HKT issue

Merrill Lynch launched an offering of 350 million covered call warrants on Hongkong Telecom shares yesterday at 32.2 cents each.

The warrants carry a premium of 7.2 per cent and a gearing of 4.2 times.

Ten warrants can be exchanged for one Telecom share at a strike price of $11.20.

The shares gained five cents yesterday to close at $13.45, just above the low for the year of $13.20.

The utility has been dragged down recently by threats of increased competition and rumours of a change in ownership.