HSI and DNEX warrants active last week

Last week, Bursa Malaysia resumed its 5-day trading session after closing for 2.5 days in the previous week in conjunction with the Chinese New Year (CNY) holidays. Trading activity in the warrants market surged for the week as the overall turnover gained by a whopping 208.2% to RM200mil, with warrants over the Hang Seng Index (HSI) representing 51.9% of the turnover. 

The Hang Seng Index (HSI) added to its previous week’s strong rally with a 1.4% weekly surge last week. The index started the week little changed but fell 1.0% on Tuesday after news that the U.S. commerce Department had added 33 Chinese entities, including WuXi Biologics which plummeted 23% on Tuesday, to its so-called “unverified list” requiring U.S. exporters to go through more procedures before shipping good to entities (CNBC, 8 February).  However, the HSI erased Tuesday’s steep losses to stage a 2.1% rebound the following day, helped by gains in the index heavyweight, Alibaba, which jumped 6.8% after Japanese conglomerate SoftBank soothed fears it was planning to offload some of its huge stake in the Chinese e-commerce giant. The index then continued to close higher on Thursday, gaining another 0.4%, before ending Friday down by 0.1% at 24.906.66 points. 

The call warrant, HSI-CI9 was the most active warrant over the HSI last week with investors net buying 4.0mil units out of 200.0 mil units traded. It was also the top traded warrant by value clocking up to RM43.7mil in value traded. Meanwhile, the call warrant HSI-CI2 was also active with a total traded volume of 146.1mil units. It is good to note that this warrant will be expiring on Friday, 25 February 2022 with its last trading day on Wednesday, 23 February2022. Investors should exercise caution when trading warrants that are going to expire as they will experience a steep decline in the time decay, which is an additional holding cost for investors. 

On the local front, call warrant over Dagang NeXchange (DNEX), DNEX-CG was the top traded warrant with a total value of RM18.1mil traded. DNEX-CG jumped 8.3% last Friday as its underlying extended its rally to a fourth day, gaining 1.9% to close at RM1.09; DNEX’s share price rose 7.9% w-o-w.

Top warrants by value traded:

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Provided for Malaysian residents information only. This commentary has not been reviewed by the Securities Commission Malaysia. It is not an offer or recommendation to trade and is not research material. Past performance is not indicative of future performance. You should make your own assessment and seek professional advice. The Warrants will not be offered to any US persons.