The overall warrants turnover surged last week, rallying 15.2% to RM273.8mil, largely contributed by the Hang Seng Index (HSI) warrants. Despite a shorter trading week for HSI warrants as the Hong Kong market was shut in conjunction with the Mid-Autumn festival, trading activity in HSI warrants remain active, recording a total trading value of RM155.5mil, representing 56.8% of the overall turnover.
The Hong Kong’s benchmark index saw another lacklustre performance last week, falling for the second consecutive week to trade at the 24,000 level, tumbling 2.9% week-on-week (w-o-w) amid concerns about China Evergrande Group’s debt woes as a bond payment deadline passed without an update. The index started the week in the red, plunging 3.3% before rebounding 1.7% mid-week to trade above the 24,500-level. However, it couldn’t sustain the positive momentum and fell 1.3% to 24,192.16 points at the end of the week.
With the HSI’s turbulence and high volatility last week, the HSI warrants were once again in the spotlight. HSI call warrant, HSI-CIG was the most active in terms of volume traded as investors traded more than 142.6mil units and net bought more than 17mil units, while put warrant HSI-HG8 had the highest turnover with RM57.2mil traded. At the time of writing, the list of sold out warrants include HSI-CIF, HSI,CIG, HSI-CIK, HSI-CIL, HSI-CIQ, and HSI-CIU. Investors should take note that when warrants are close to sold out, the market maker may widen spreads by raising the offer price (or removing the offer price when a warrant is completely sold out). However, the bid price will be maintained at a fair price and will track the movement of the underlying price accordingly, allowing investors to sell back the warrants a fair price.
Meanwhile, on the local front, call warrant over Greatech Technology (GREATEC), GREATEC-CJ was the top traded warrant among warrants over the Malaysian shares. This warrant recorded a total trading volume of 25.8mil units while call warrant over Dagang NeXchange (DNEX), DNEX-CG came in second with a total trading volume of 22.0mil units, extending another week of active trading among investors. GREATEC closed 2.0% up at RM7.50 last Friday while DNEX slid 2.4% to close at RM0.810.
Top HSI warrants by turnover:
|Warrant name||Turnover (‘mil.)||Issuer||Exercise level/price||Expiry date|
|HSI-HG8||RM57.2||Macquarie||24,400||28 Oct 2021|
|HSI-CIV||RM24.3||Macquarie||26,600||28 Jan 2022|
|HSI-CIG||RM20.5||Macquarie||26,600||28 Oct 2021|
|HSI-HG7||RM17.8||Macquarie||22,400||28 Oct 2021|
|HSI-CIL||RM12.3||Macquarie||27,000||29 Nov 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.