The Malaysia warrants market saw a jump in overall turnover for the third week of November compared to its previous week, registering up to RM299.5mil in value traded which is a 39% increase week-on-week (w-o-w). Trading in warrants over the Hang Seng Index (HSI) continued to be the dominating factor in the weekly turnover, accounting for RM234.4mil, which is over 78.2% of the overall turnover owing to the volatile moves in its underlying.
The HSI November futures kicked off the week on a positive note to finish both Monday and Tuesday in the green before losing ground for the rest of the week to end Friday at 24,989, down close to 1.3% w-o-w dragged by a sharp plunge in market heavyweight Alibaba after it slashed its outlook for its current fiscal year along with the release of its September quarter results on Thursday which missed analyst estimates for a second straight quarter.
The trading week saw active trading in both the call warrant HSI-CIV (exercise level of 26,600) and the put warrant HSI-HMG (exercise level of 25,000) which recorded 268.9mil and 177.6mil units traded with a total traded value of RM80.2mil and RM74.7mil respectively over the week. This is followed by the near expiring put warrant HSI-HMD (expiry date 29 November 2021) which recorded up to 166.8mil units traded with a total value of RM49.8mil. Investors should note that warrants nearing expiry will experience a much higher rate of time decay, i.e. the warrant price will start reducing more rapidly even if the underlying price or level remains constant. Meanwhile, call warrant HSI-CI1 saw 52.7mil units exchanged hands for the week, occupying the fifth spot in the most active list with a total traded value of RM15.6mil.
Over at the local front, call warrants over Dagang NeXchange (DNEX), namely DNEX-CG and DNEX-CF were among the active warrants for the week as the underlying snapped a three-week winning streak to end the week lower at RM0.825 (down 1.8% w-o-w). Other popular warrants last week were INARI-C90, INARI-C92 and MEITUAN-C5 with total traded volumes of up to 9.8mil, 16mil and 12.7mil units respectively.
Top warrants by volume traded:
|Warrant name||Volume (‘mil.)||Issuer||Exercise level/price||Expiry date|
|HSI-CIV||268.9||Macquarie||26,600.00||28 Jan 2022|
|HSI-HMG||177.6||Macquarie||25,000.00||30 Dec 2021|
|HSI-HMD||166.8||Macquarie||25,600.00||29 Nov 2021|
|DNEX-CG||55.7||Kenanga||RM1.20||30 May 2022|
|HSI-CI1||52.7||Macquarie||27,400.00||25 Feb 2022|
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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.