The Hong Kong market saw at least three covered call warrants issued yesterday, two of which were on second-tier shares. Robert Fleming & Co launched 110 million call warrants on property-investor Pearl Orient Holdings. The warrants are the first on Pearl issued in Hong Kong following the lowering of the minimum free-float requirement to $4 billion. Richard Williams, director of global derivatives at co-manager Jardine Fleming in Hong Kong, said his firm was taking advantage of the new regulations to launch a warrant on a smaller, possibly more exciting firm. The one-year warrants carry an exercise price of $2.60, a premium of 18.8 per cent and a gearing of 5.3 times. Pearl Orient's share price reacted to the warrant by rising five cents to close at $2.65 yesterday. Shipping firm Cosco Pacific was the subject of 500 million call warrants. However, because the firm's public float does not reach the $4 billion minimum, Peregrine will list the 18 month warrants in Luxembourg. The warrants carry a premium of 21.5 per cent, a gearing of 4.3 times and a strike price of $6. Cosco shares added five cents to $6.10 yesterday. Meanwhile, Merrill Lynch has launched 75 million warrants on Hutchison Whampoa. The one-year warrants have a strike price of $39.50, gearing of 3.98 times and a premium of 8.1 per cent. Hutchison's share price, however, did not react favourably to the news, falling 20 cents to end at $47.60.