HSI-C5P and MYEG-C68 stole the limelight

Warrants Commentary (8 July to 12 July)

The Malaysia warrants market recorded a turnover of RM432.5mil. last week, 13.9% higher than the preceding week. Warrants over the Hang Seng Index (HSI) continued to be investors’ favourite with RM317.1mil. traded, mainly driven by the increased volatility in Asia’s most active stock market.

Last Sunday, fresh political violence broke out as riot police baton-charged anti-extradition protestors following another massive rally (7 Jul, South China Morning Post). On Monday, the HSI futures plunged below the 28,500 level for the first time since late June 2019 to close 1.5% lower at 28,360 points. The HSI futures then slid another 0.9% on Tuesday before reversing some losses over the rest of the week to close at 28,539 points on Friday. The strong rebound took place last Wednesday after the Federal Reserve chairman Jerome Powell signalled a potential rate cut later this month to cushion the U.S. economy against the risk of slower global growth and trade-policy uncertainty (10 Jul, The Wall Street Journal).

The most notable warrant last week was call warrant HSI-C5P, which garnered a total turnover of RM67.9mil. Investors who were bullish on the HSI took the opportunity of the dip at the start of the week to collect a total of 12.4mil. units of this warrant from Monday to Wednesday, before selling back 13.4mil. units as the warrant gained about 11.9% over Thursday and Friday. In addition, put warrant HSI-H6R was also heavily traded by investors last week, with a turnover of RM56.1mil. The bid price of the put warrant gained a whopping 26.0% as the HSI futures declined over the first two trading days last week. Put warrants generally move in an opposite direction to the underlying’s price movement.

On the local front, the share price of electronic government services provider My E.G. Services (MYEG) was sluggish at the start of last week, but picked up momentum on Thursday and Friday to close 2.7% higher week-on-week (w-o-w) to RM1.53 on Friday. Call warrant MYEG-C68 stole the limelight last week with a total RM4.6mil. traded. The bid price of the call warrant surged 13.3% w-o-w to match the price increase in the underlying.

Top warrants by traded value:

Warrant nameValue
(RM ‘mil)
IssuerExercise levelExpiry date
HSI-C5P67.9Macquarie29,60027 Sep 2019
HSI-H6R56.1Macquarie27,60027 Sep 2019
HSI-C5J43.6Macquarie28,80030 Jul 2019
HSI-H6Q34.0Macquarie26,20027 Sep 2019
HSI-C7C24.8Macquarie  30,40028 Nov 2019

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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.