Follow Us For The Latest Updates

Follow Us For The Latest Updates

G20 meeting boosts market sentiment for HSI

Warrants Commentary (1 July to 5 July)

Last week, despite the protests occurring in Hong Kong on its public holiday in conjunction with the HKSAR Establishment Day on Monday, the Hang Seng Index (HSI) had a strong rally, trading above the 28,000 level when it reopened from the long weekend.  Market sentiments were boosted after the US-China meeting at the Group of 20 (G20) Summit last Saturday, which ended with a truce as both parties agreed to resume talks that have stalled since May. The meeting saw Trump putting on hold the additional tariffs on USD300bil. worth of Chinese products which he had earlier threatened.

On Tuesday (2 July), the HSI futures broke the 29,000 level to trade at 29,054 points in the morning session, before ending the day 1.5% higher at 28,932 points. However, the futures closed in the red over the next three days, ending the week at 28,780 points. 

Despite the shorter trading week in Hong Kong, the HSI warrants contributed the highest turnover among all underlyings, recording a total turnover of RM218.4mil., approximately 58.4% of the overall warrants turnover on Bursa Malaysia. The HSI put warrant, HSI-H6R, emerged as the most active warrant with its trading value recording the highest at RM59.2mil.  Throughout the week, investors traded 151.9mil. units and took home 1.2mil. units of this warrant, which fell 20.9% week-on-week (w-o-w). 

The HSI call warrant, HSI-C5J, was also popular among investors as they traded a total turnover of RM39.6mil and net bought 4.6mil units over the week. HSI-C5J is among the eight HSI warrants expiring at the end of this month. Investors should exercise caution when trading shorter-dated warrants as they may experience the highest time decay; the time value of warrants decline at the fastest rate when they  approach expiry. Investors should also keep a look out by regularly checking the Bursa Malaysia website for any changes to the July 2019 HSI warrants’ expiry date, as it currently coincides with the newly-announced public holiday on 30 July 2019. 

On the local front, the call warrant MYEG-C68 continued to be popular among investors as last week’s trading volume rose 25.9% to 47.6mil. units from 37.8mil. units. This warrant has an effective gearing of 3.5 times, which means it moves approximately 3.5% for every 1% change in the underlying (all other factors held constant).  

Top warrants by traded value:

Warrant nameValue
(RM ‘mil)
IssuerExercise levelExpiry date
HSI-H6R59.2Macquarie27,60027 Sep 2019
HSI-C5J39.6Macquarie28,80030 Jul 2019
HSI-C5P30.7Macquarie29,60027 Sep 2019
HSI-H6Q24.2Macquarie26,20027 Sep 2019
HSI-C7D15.5Macquarie  31,00030 Dec 2019

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

To view the full list of structured warrants available on Bursa Malaysia, kindly visit malaysiawarrants.com.my

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:

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

More Posts

AME Elite Consortium Bhd – 26th Feb 21

As of 3QFY21, AME is equipped with an unbilled construction orderbook of approximately RM200.0m, representing unbilled orderbook-to-cover ratio at 1.1x against FY20 construction revenue of RM185.2m that will provide earnings visibility over the next two years. While there were 22 Covid-19 cases reported at the worker’s dormitory, AME has conducted immediate sanitisation and set up a separate off-site quarantine centre.

OCK Group Bhd – 26th Feb 21

As of FY20, OCK owns and manages over 4200 telco sites in Malaysia (500 sites), Myanmar (1,000 sites) and Vietnam (2,700 sites) that will provide stream of recurring income over the long term. We note OCK will actively participate on the National Digital Network Initiative (Jendela) plan with RM4.0bn infrastructure works for more than 1,700 sites to be tendered by 1Q2021, whilst capitalising on the 5G transition that may see demand for telecommunication sites quadruple against the number of 4G sites.

market pulse

Return of volatility

The FBM KLCI has rebounded strongly amid bargain hunting activities as steel-related and technology stocks were traded higher following several strong sets of results under the respective sectors. Meanwhile, healthcare sector was the sole decliner in the broader market. We believe the market will be pricing in Covid-19 vaccination progress and market may trend on an upward bias tone, focusing on recovery theme stocks. On the commodity side, the crude palm oil price has climbed above RM3,700, while Brent oil price is firmly trading above USD65.

SLP Resources Bhd – 25th Feb 21

Moving in FY21f, we believe that sales from the local market will continue to take charge (>50%), after raking 53.3% of total revenue in FY20 as oppose to only 39.0% recorded in FY19. For now, SLP will focus on ramping up the production of kitchen and garbage bag, targeting 25% of production output in FY21f (from less than 20% recorded in FY20).

g20-meeting-boosts-market-sentiment-for-hsi-m-online