The stock exchange has successfully required 20 issuers to consolidate 115 low-priced derivative warrants on a 10-to-one basis in an attempt to stimulate turnover in the flagging instruments. Exchange executive director Lawrence Fok Kwong-man said the move would help reflect the true value of the warrants and stimulate trading. 'Since the market downturn in October last year, the prices of many derivative warrants have fallen sharply,' he said. 'Some warrants are now traded at one cent and cannot be traded if they fall below this level as the exchange trading system could not handle such low prices. 'Consolidating 10 warrants into one will increase the price and should mean they can be traded for a longer period of time.' If the consolidated warrants fell to less than the minimum trading price again, there would be no further consolidation. He said the exchange was assessing the results of the exercise to decide whether to make it a long-term policy. Warrants included in the exercise must have been traded at five cents or less on April 3, with their expiry date falling after May 18. He said 115 warrants met the above requirements, with 82 at one cent and 33 at between one and five cents. The certificates of the new warrants can be exchanged free of charge from April 20 to May 15, with a charge of $2.5 per exchange collected from May 16. There will be parallel trading of the existing and newly consolidated warrants from May 4 to May 15. From May 18, only the consolidated warrants will be traded. Bank of China Group Securities vice-chairman Fung Chi-kin said the consolidation would allow investors holding the low-priced warrants to sell. However, he questioned whether there would be any demand to buy the consolidated warrants as many of them are out of money and carry a very high premium. Mr Fok also said the exchange was now displaying the premium, gearing and underlying value of basket warrants on trading terminals. He said the information was updated every minute and would be expanded to include implied volatility later. The information provided would increase the transparency of the basket warrants, Mr Fok said.