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.