Follow Us For The Latest Updates

Follow Us For The Latest Updates

Investors look to puts for downside protection

The warrants market in Malaysia witnessed yet another exciting week with RM1.6bil traded. Despite a shorter trading week as the market is shut on Friday in conjunction with the Hari Raya Haji celebration, the total turnover is up 7.6% week-on-week (w-o-w) as investors continue to favour warrants over Malaysian stocks such as Hartalega Holdings, Topglove Corporation and many more.
macquarie structured warrants 20200914

The warrants market in Malaysia witnessed yet another exciting week with RM1.6bil traded. Despite a shorter trading week as the market is shut on Friday in conjunction with the Hari Raya Haji celebration, the total turnover is up 7.6% week-on-week (w-o-w) as investors continue to favour warrants over Malaysian stocks such as Hartalega Holdings, Topglove Corporation and many more. 

Call warrants over Hartalega dominated the warrants space last week with HARTA-C48 and HARTA-C53 taking the first and second spot on the top traded warrants list with RM95.5mil and RM92.3mil traded, respectively. The share price of Hartalega Holdings recorded a 14.7% w-o-w gain, right behind Kossan Rubber Industries’ outstanding 27.5% w-o-w gain last week.

There was a surge in demand for put warrants over the FBM KLCI last week, especially put warrant FBMKLCI-HAM which took center stage with RM7.7mil traded. The local benchmark’s futures contract traded higher for the first 3 days of the week before reversing some of its gains to close below the 1,600 level on Thursday. The 0.8% fall in the FBM KLCI July futures last Thursday came right after UMNO’s decision to not formally join Perikatan Nasional if the ruling pact registers as a formal coalition, though UMNO President Datuk Seri Dr Ahmad Zahid Hamidi added that this does not mean that UMNO is withdrawing its support from the government (The Star, 30 July). Investors took home more than 3mil units of FBMKLCI-HAM last Thursday to hedge against the rising political uncertainty as put warrants move in the opposite direction to the underlying share or index.

Meanwhile, warrants over the Hang Seng Index (HSI) saw a RM81.1mil turnover, which is 5.2% of the total Malaysia warrants market. Call warrant HSI-C9T emerged as the most active HSI warrant with RM20.4mil traded. Bullish investors took the opportunity of the sluggish performance in the HSI futures on Monday (27 Jul) to collect 6.4mil units of this call warrant, which resulted in it being fully sold out. Investors subsequently sold back a total of 13.6mil units of this warrant on Tuesday and Wednesday as the HSI futures rebounded above the 24,900 level, causing it to be removed from the sold out list.

Top FBMKLCI warrants by value traded:

Warrant nameValue
(RM ‘mil.)
IssuerExercise levelExpiry date
FBMKLCI-HAM7.7Macquarie1,53031 Dec 2020
FBMKLCI-H8Z2.7Kenanga1,55030 Nov 2020
FBMKLCI-H8R1.1Maybank1,50830 Oct 2020
FBMKLCI-C7Y0.8Kenanga1,65030 Nov 2020
FBMKLCI-C9O0.8Macquarie1,53029 Jan 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 info@malaysiawarrants.com.my

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.

Share:

Share on facebook
Share on twitter
Share on linkedin
Share on telegram

More Posts

Protasco Bhd – 27th Nov 20

We note that new contracts flow remain absent in 3QFY20, implying tapering of construction orderbook. On a brighter note, the maintenance segment is expected to provide some alleviation to the weakness across other segments, backed by an outstanding orderbook to approximately RM3.70bn that ensure recurring stream of income till 2029. We expect Protasco to tap into the RM1.30bn allocation for construction and upgrading of rural roads for 920km under Budget 2021.

Econpile Holdings Bhd – 27th Nov 20

As of 1QFY21, Econpile’s is equipped with an unbilled construction orderbook of approximately RM680.0m from 25 on-going projects. Moving forward, the group’s unbilled orderbook-to-cover ratio at 1.4x against FY20 revenue of RM403.0m will provide earnings visibility over the next two years.

market pulse

Towering above 1,600

The passing of Budget 2021 has instilled further confidence into the Malaysian market as the FBM KLCI soared beyond the 1,600 psychological level yesterday. With the uncertainty from the aforementioned event being eliminated, the focus has now reverted back to the economic recovery progress. Hence, we reckon that the positive momentum may resume over the near term. The lower liners are also on a positive note with investors nibbling on beaten down stocks, capitalising on the positive market sentiment.

OCK Group Bhd – 26th Nov 20

We attended the post quarter results analyst briefing and came away feeling re-assured on OCK Group Bhd (OCK) expansion moving into FY21f. 9MFY20 was largely affected by the slowdown of sites deployment due to the Covid-19 pandemic. Moving into the final quarter of FY20, we understand that the 4Q results are traditionally stronger over the years may see an exception in FY20 due to the current implementation of Conditional Movement Control Order (CMCO) that is impacting the engineering services segment via restriction of interstate travel.

investors-look-to-puts-for-downside-protection-m-online