Follow Us For The Latest Updates

Follow Us For The Latest Updates

Bargain hunting in HSI calls continued in bearish market

Warrants Commentary (17 to 20 September)

The overall warrants turnover for last week was RM342.3mil., a slight decrease of 1.4% from the week prior. The Hang Seng Index (HSI) warrants remained the biggest contributor, making up 80.6% of turnover. Last week, one of the top news was the benchmark interest rate cut, which saw the US Federal Reserve (the Fed) lower the interest rate by 0.25% to a range of 1.75% to 2% last Wednesday during its September meeting. This was the second rate cut since July this year, amid global growth concerns and muted inflation pressures. A top Fed official signalled Friday that further interest rate cuts could come before year-end (The New York Times, 20 Sept).

Hours after the Fed’s quarter point cut, the Hong Kong Monetary Authority (HKMA) also cut its benchmark interest rate by a quarter points, in line with the Fed, seeing its interest rate reduced to 2.25% from 2.5%. The HSI entered into a bearish state as it fell five days in a row, registering the longest losing streak in six week, as the latest move added to investors’ worry about the impact of the continuing violent protests on the city’s economy. Week-on-week (w-o-w), the index plunged 3.4%. 

Throughout last week, investors net bought a total 51.2mil units of the call warrants over the HSI, and net sold 55.3mil units of the put warrants over the HSI. Call warrant HSI-C7F continued to be investors’ favorite, taking up the top position in last week’s warrants space as its traded value rose 10.6% to RM49.1mil. Meanwhile, put warrant HSI-H6T came in a close second, with its traded value recording at RM49.0mil. HSI-C7F, which tracks the movement of its underlying index, plunged 33.3% w-o-w, while HSI-H6T, which moves in an opposite direction from the HSI futures, jumped 47.9% w-o-w. 

Elsewhere, on the local front, Frontken shares had a strong bullish momentum last week with its share price closing in the green for four consecutive days. The share price surpassed the RM1.70 mark last Wednesday and recorded a gain of 5.4% w-o-w as it closed at RM1.75 last Friday (+0.6%). Call warrant FRONTKN-CD became the most active warrant over Malaysian counters, with investors trading a total 17.7mil units; FRONTKN-CD’s price rose 5.3% w-o-w. 

Top warrants by value traded:

Warrant nameValue
IssuerExercise levelExpiry date
HSI-C7F49.1Macquarie27,40030 Dec 2019
HSI-H6T49.0Macquarie27,00030 Oct 2019
HSI-H8B46.4Macquarie25,60028 Nov 2019
HSI-C7J26.9Macquarie30,00027 Feb 2020
HSI-H8E25.7Macquarie24,60030 Dec 2019

If you have any questions or need further assistance, please do not hesitate to contact us via our email us at

To view the full list of structured warrants available on Bursa Malaysia, kindly visit

Provided for Malaysian residents information only. 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.


Share on facebook
Share on twitter
Share on linkedin
Share on telegram

More Posts

AME Elite Consortium Bhd – 2nd Dec 20

The proposed AME REIT would also provide stable and recurring income to investors, with at least 90.0% of its income to be distributed as dividends to unitholders. We note that slightly more than half of the current tenants of the industrial properties has more than 5 years of lease under their agreements. Additionally, AME REIT is expected to benefit from lower tax rate compared to prevailing corporate tax rate at an average of 23.4% recorded over the past 4 years.

technical focus

Technical Focus – 2nd Dec 20

Established historical track record since inception in 1975 with strong brand presence in the Malaysia household market. Demand will be relatively healthy, owing to the rising awareness of personal hygiene following the Covid-19 pandemic. Disposal of loss-making toilet rolls and tissue manufacturing subsidiary; NTMP Paper Mill (Bentong) Sdn Bhd allow the group to streamline and focus on the existing core businesses. Technically, price has experienced a flag-formation breakout above RM0.73, targeting the next resistances at RM0.795-0.815 with long term target at RM0.90.

market pulse

Swift recovery

Expectedly, the FBM KLCI performed a swift recovery as the key index recouped most of its previous session losses to re-claim the 1,600 psychological level. We reckon some stability will ensue with further upsides are in the cards as investors continue to focus on the economic recovery progress. Meanwhile, we believe that the lower liners will continue to enjoy their upward momentum as liquidity remains well on the equities market with investors capitalising on the positive market sentiment.

market pulse

Tempered by MSCI portfolio re-balancing

The FBM KLCI started off the week on a dour note alongside with the weakness across regional peers on the increasing geopolitical tension between US and China. Still, the FBM KLCI recorded 95.82 pts on gain (+6.5% MoM) during November 2020. Although we see renewed volatility unfolding, we reckon that bargain hunting activities may take precedence after the sharp fall yesterday. On the other hand, we think that the lower liners are poised for further upsides, driven by the improved trading liquidity which may extend the rotational play.