The Malaysia warrants market saw further uptick in terms of trading activities last week, where the total warrants turnover increased 18.2% week-on-week (w-o-w) to RM243.1mil. Warrants over the Hang Seng Index (HSI) appeared to be investors’ favourite with a RM138.8mil turnover, which made up 57.1% of the total warrants market.
The HSI August futures started the week strong as a result of the Chinese technology stocks rally on Monday and Tuesday due to Tencent’s stock buyback and Cathie Wood’s buying into JD.com after a strong set of results (Business Times, 24 Aug). Despite losing some momentum towards the second half of the week, the HSI August futures is still up 2.4% w-o-w. It was a tug of war between bullish and bearish investors last week as there were 3 HSI calls and 2 HSI puts on the top 5 list of most active structured warrants on Bursa Malaysia.
Call warrants HSI-CIL, HSI-CIG and HSI-CIQ soared 17.2%, 19.2% and 22.2% last week to track the gains in the underlying index futures. Investors should take note that warrants with higher effective gearing levels tend to experience larger price movements in percentage terms as compared to warrants with lower effective gearing levels, with all other factors kept constant. Meanwhile, bearish investors took the opportunity last week to accumulate a total of 12.1M units of HSI-HG1 as the put warrant finished 42.1% lower w-o-w. Unlike call warrants, put warrant prices will move in the opposite direction with respect to the underlying index/shares.
On the local front, we saw huge demand for call warrants over MY E.G. Services (MYEG) and CTOS Digital (CTOS) as both underlyings recorded their best performance in August last week. MYEG’s share price rallied 10.8% to finish at RM1.92 while CTOS close 9.8% higher w-o-w. MYEG-C2B was the most popular MYEG call warrant as its bid price surged 26.9% higher w-o-w to RM0.165. Meanwhile, bullish investors took large positions in call warrant CTOS-CE, net buying a total of 10.0mil units last week as the bid price of the call warrant jumped 33.3% w-o-w to RM0.120.
Top warrants by value traded:
|Warrant name||Value (RM‘mil.)||Issuer||Exercise level/price||Expiry date|
|HSI-CIL||30.1||Macquarie||27,000||29 Nov 2021|
|HSI-HG1||29.5||Macquarie||23,400||29 Sep 2021|
|HSI-HG2||16.9||Macquarie||25,400||29 Sep 2021|
|HSI-CIG||16.5||Macquarie||26,000||28 Oct 2021|
|HSI-CIQ||10.7||Macquarie||29,800||30 Dec 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.