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HSI warrants in focus as underlying gains for fourth week

The third spot was also occupied by a near expiring put warrant, HSI-HG8 (expiry date 28 October 2021) with a total of 120.3mil units changing hands
macquarie structured warrants 20200914

The warrants market witnessed a jump in overall turnover last week compared to the previous week, recording up to RM239.6mil traded versus RM214.5mil in the previous week, an 11.7% jump despite it being a shorter trading week as Bursa Malaysia was shut on Tuesday in conjunction with the Birthday of Prophet Muhammad holiday. 

Warrants over the Hang Seng Index (HSI) dominated the weekly turnover, accounting for RM137.6mil traded which is over 57.4% of the overall turnover, owing in part to the potent rally in its underlying. The buoyant week saw the HSI October futures surging from Monday through Wednesday before taking a breather on Thursday and regaining momentum towards the end of the week to finish at a positive note at 26,110 (+3.1% w-o-w), its highest level since mid-September. Gains were partly buoyed by easing concerns about property debt default after reports that troubled developer China Evergrande paid the interest of a bond to offshore investors just ahead of its Saturday’s deadline (SCMP, 22 Oct).

The holiday-shortened week saw active trading in the call warrant, HSI-CIG (expiry date of 28 October 2021) coming in at the top spot in the most active list with up to 125.5mil units traded followed by the put HSI-HMC with up to 125.1mil units traded. The third spot was also occupied by a near expiring put warrant, HSI-HG8 (expiry date 28 October 2021) with a total of 120.3mil units changing hands. 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 warrants HSI-CIV and HSI-CIL have each recorded up to 103.3mil and 84.2mil units traded for the week. HSI-CIV was also the top warrant traded by value, clocking in a total value traded of RM55.8mil for the week. 

On the local front, call warrants GENTINGC1L and DIALOG-C69 were in focus with up to 41.8mil and 30.3mil units traded. Other popular warrants for the week were MYEG-C2H, EKOVEST-C26 and MAYBANK-C75 with total traded volumes of up to 28.1mil, 27.6mil and 22.9mil units respectively. 

Top warrants by volume traded:

Warrant nameVolume (‘mil.)IssuerExercise level/priceExpiry date
HSI-CIG125.5Macquarie26,00028 Oct 2021
HSI-HMC125.1Macquarie23,60029 Nov 2021
HSI-HG8120.3Macquarie24,40028 Oct 2021
HSI-CIV103.3Macquarie26,60028 Jan 2021
HSI-CIL84.2Macquarie27,00029 Nov 2021

If you have any questions or need further assistance, please do not hesitate to contact us via our hotline at 03-2059 8840 or 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. 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.

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