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Great debut for the new HSTECH-C1

macquarie structured warrants 20200914

The Malaysia warrants market posted a slight 0.6% increase in turnover to RM421.1mil from RM419.3mil a week earlier. Last Tuesday was a notable day as the total warrants turnover surged above the RM100mil mark for the first time this month. The surge can be attributed to the first Hang Seng TECH Index (HSTECH) warrants launch in Malaysia which allows investor to gain broader exposure to the technology sector in Hong Kong. The technology focussed index is a lot more volatile than the Hang Seng Index (HSI) and FBM KLCI, boasting an average volatility of 37%, with 94% growth over the past 12 months (as of 31 Jan 2021).

The HSTECH March futures started the week with a 6.2% dive to close at 8,007 last Monday but found some support at the 7,700 level on Tuesday following close to a month of decline. The index futures subsequently traded higher in the next two days before erasing some weekly gains on Friday to end the week at 8,430. HSTECH-C1 was the most popular warrant on Tuesday with 64.9M units traded as bullish investors took home 12.5M units, which resulted in the new call warrant being close to sold out on its first day of listing. The bid price of the call warrant hit a weekly high at RM0.100 on Friday morning following the strong rebound in HSTECH futures. The large fluctuations in the HSTECH futures provide increased opportunities for investors to potentially profit from movement in either direction via the new HSTECH call warrant and put warrants.

Meanwhile, the HSI warrants remained the two most popular warrants last week with call warrant HSI-CFK and put warrant HSI-HGK seeing 196.8mil and 123.6mil units traded, respectively. Bearish investors net bought 7.7mil units of HSI-HGK last week as the HSI futures rebounded from a weekly low at 28,283 on Tuesday (9 March). 

On the local bourse, call warrant AIRASIA-C1J saw heavy trading throughout the week and ended up placing third on the most popular warrant list with 92.4mil units traded. Last Tuesday, the share price of low-cost carrier Air Asia Group traded above the RM1.00 level for the first time since early June, and closing 23.0% higher week-on-week, marking its fourth consecutive week of gains since 22 Feb 2021.

Top warrants by volume traded:

Warrant nameVolume
IssuerExercise level/priceExpiry date
HSI-CFK196.8Macquarie31,00029 Jun 2021
HSI-HGK123.6Macquarie27,00028 May 2021
AIRASIA-C1J92.4Kenanga0.8026 Apr 2021
HSTECH-C190.9Macquarie15,00029 Sep 2021
SUPERMX-C1I80.3Kenanga14.0031 May 2021

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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.