With the public holiday on Monday, the shortened trading week resulted in a lower total warrants turnover of RM129.1mil last week. Investors should also note that there is a public holiday in Hong Kong on Monday (14 Jun), meaning there will be no market making for warrants over Hong Kong listed underlyings such as the Hang Seng Index (HSI), Hang Seng TECH Index (HSTECH), iShares FTSE China A50 ETF (China A50 ETF) and Hong Kong shares.
The previous week’s interest in warrants over Serba Dinamik (SERBADK) and MMC Corporation (MMCCORP) carried into the past week. SERBADK shares continued to fall, kicking off Tuesday with a 19% plunge to RM0.620 before staging a slight recovery over Wednesday and Thursday, but finished Friday with a 5.5% decline, ultimately closing 20.9% lower week-on-week (w-o-w) to RM0.605. Call warrant SERBADK-C17 took the fifth spot in the top traded list with 27.5mil units traded.
In contrast, after MMCCORP shares limit up on the previous Friday (4 Jun) following Tan Sri Syed Mokhtar’s proposal to bring MMCCORP private via a selective capital reduction (SCR) exercise at RM2.00 per share, the shares ended the week 7.1% higher to RM1.81. Call warrant MMCCORP-C23 was third in the top traded list with 35.2mil units traded. Other than that, the shares of Genting Malaysia (GENM) moved 3.8% higher w-o-w to RM2.98. GENM-C89, which came in second in volume traded last week, correspondingly moved up by 5.9%.
On the foreign front, the HSI fell for the 7th consecutive day on Thursday, before staging a small 0.4% recovery on Friday to end the week at 28,842.13 points, down 0.3% w-o-w. Despite the lacklustre performance in the current weeks, the HSI is still up by 5.9% year-to-date. Two HSI warrants ended up in the top traded list – put warrant HSI-HGN with 85.5mil units traded and call warrant HSI-CFP with 29.0mil units traded.
Investors should note that HSI-HGN expires on 29 June 2021 with its last trading date on 25 June 2021, meaning investors would be unable to buy or sell this warrant after 25 June 2021. Further, investors should consider warrants with longer time to expiry, as warrants with shorter time to expiry tend to experience a faster rate of time decay, resulting in higher holding cost for investors.
Top warrants by volume traded:
|Warrant name||Volume (mil.)||Issuer||Exercise level/price||Expiry date|
|HSI-HGN||85.5||Macquarie||28,000||29 Jun 2021|
|GENM-C89||43.6||Kenanga||3.1137||8 Nov 2021|
|MMCCORP-C23||35.2||RHB||1.00||27 Aug 2021|
|HSI-CFP||29.0||Macquarie||31,600||29 Jul 2021|
|SERBADK-C17||27.5||Maybank||1.48||30 Nov 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.