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Index warrants regain focus with global market developments

Last week, the Malaysian warrants market saw a dip in turnover to RM295.4mil, 29.8% lower from the previous week, led by a decline in turnover for warrants over Malaysian shares with its turnover falling 33.6% week-on-week
macquarie structured warrants 20200914

Last week, the Malaysian warrants market saw a dip in turnover to RM295.4mil, 29.8% lower from the previous week, led by a decline in turnover for warrants over Malaysian shares with its turnover falling 33.6% week-on-week (w-o-w). Investors shifted their focus to the index warrants, some of which experienced lesser declines w-o-w, namely warrants over the Hang Seng Index (HSI), S&P 500® Index and the iShares A50 China ETF. Index warrants took up 41.9% of warrants turnover last week, an increase from 38.6% in the previous week.

The HSI gained for four straight days last week to close at 29,405.7 on Thursday, before losing most of its gains for the week on Friday as the overnight slide in US technology stocks weighed on Asian markets, to finish the week at 28,990.9, a slight 0.9% higher w-o-w. The HSI futures made similar moves, finishing the week at 28,934, up 0.8% w-o-w. Put warrant HSI-HGK and call warrant HSI-CFK swapped places on the top warrants list but once again had the highest volumes traded at 167.8mil and 122.8mil units, respectively. On Friday alone, as the HSI futures slumped 1.5%, bullish investors net bought 10.2mil units of call warrant HSI-CFK and took profit on 19.9mil units of put warrant HSI-HGK.

Meanwhile, the Hang Seng TECH Index (HSTECH) futures had a more volatile week as it fell 1.9% on Monday then rose 5.2% over the next 3 days before closing 1.9% lower to 8,498 on Friday, culminating in a 1.2% gain w-o-w. Call warrant HSTECH-C1 was the top traded HSTECH warrant with 18.4mil units traded. Investors may capture movements in the Chinese technology stocks through warrants over the HSTECH. Whether bullish or bearish, investors may capture trading opportunities with both call and put warrants available.

On the local front, call warrant AIRASIA-C1J placed third again last week with 60.3mil units traded as the shares of AirAsia Group rose 3.5% w-o-w to finish the week at RM1.19, marking another week of gains as movement control order restrictions are gradually being lifted around the country. Other than that, call warrants SUPERMX-C1I and DSONIC-C30 also made the top 5 most active list.

Top warrants by volume traded:

Warrant nameVolume
(’mil.)
IssuerExercise level/priceExpiry date
HSI-HGK167.8Macquarie27,00028 May 2021
HSI-CFK122.8Macquarie31,00029 Jun 2021
AIRASIA-C1J60.3Kenanga0.8026 Apr 2021
SUPERMX-C1I36.3Kenanga14.0026 Jul 2021
DSONIC-C3031.9Ambank0.5822 Jul 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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