Trading activity in warrants extended gains in the previous week with its turnover rising another 9.6% week-on-week (w-o-w) to RM150.3mil, due to the heavy trading in warrants over the Hang Seng Index (HSI) and the S&P500® Index (SP500) particularly on Monday (22 June). Both the HSI and SP500 warrants recorded a combined trading value of RM78.1mil, which was 52.0% of the overall warrants turnover last week.
Last Monday the SP500 rallied 1.4% to record its best gain since May following the Federal Reserve’s surprise hawkish shift to start raising interest rates and tapering asset purchases sooner than expected. The Fed’s Chairman Jerome Powell reiterated his views the following day that the inflation pressures will be transitory after a notable increase in recent months (Reuters, 22 June). Subsequently, the SP500 rallied another 0.5% on Tuesday and ultimately recorded a weekly gain of 2.7%. Meanwhile, the HSI fell a total 1.7% earlier in the week before rebounding 3.5% over three days and closed above the 29,000-mark last Friday.
Four HSI warrants consisting of two call warrants i.e. HSI-CFL (+12.5% w-o-w) and HSI-CFQ (+19.1% w-o-w) recorded over 241mil units traded while another two put warrants i.e. HSI-HGN and HSI-HGR had a total trading volume of 257.2mil units. HSI-HGN was already worthless last Friday while HSI-HGR fell 48.1% w-o-w. Investors should note that HSI-CFL and HSI-HGN, along with four other HSI warrants are already suspended today (Monday, 28 June) as they are expiring tomorrow (Tuesday, 29 June). Meanwhile, the SP500 put warrant, SP500-HU (-10.7%) saw investors buying 1.5mil out of 19.4mil units traded.
On the local front, both Top Glove (TOPGLOV) and Dagang NeExchange (DNEX) mostly traded in the negative territory last week, falling 3.7% w-o-w and 15.1% w-o-w, respectively. TOPGLOV-C1L and DNEX-CA were among the top warrants over the Malaysian stocks with investors trading 54.3mil units and 47.5mil units, respectively. The new DNEX-CB listed last Thursday also showed good demand as investors took home 4.3mil out of 10.9mil units traded. Other than that, SERBADK-C17, EURO-CA and PMETAL-C55 were also in the top 10 most active warrants.
Top index warrants by volume traded:
|Warrant name||Volume (’mil.)||Issuer||Exercise level/price||Expiry date|
|HSI-HGN||192.0||Macquarie||28,000||29 Jun 2021|
|HSI-CFL||168.6||Macquarie||29,000||29 Jun 2021|
|HSI-CFQ||73.2||Macquarie||29,600||29 Jul 2021|
|HSI-HGR||65.2||Macquarie||26,800||29 Jul 2021|
|SP500-HU||19.4||Macquarie||3,800||20 Dec 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.