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Rocky week for glove names despite FBMKLCI moving higher

Call warrant TOPGLOV-C1L made it into the top warrants list with 35.7mil units traded, while other warrants such as call warrant SUPERMX-C1Z and put warrant SUPERMX-HF also led the pack. TOPGLOV-C1L has relatively longer time to expiry as it expires on 8 October 2021, meaning it experiences relatively lower time decay i.e. lower holding costs for investors.
macquarie structured warrants 20200914

Despite the country’s Covid-19 cases continuing to record new highs, the local benchmark FBM KLCI closed in the green each day last week, ending the week 2.1% higher at 1,594.44 points. However, the shares of Malaysia’s largest glove makers bucked the trend to close in the red all week, as the United States Customs and Border Protection (“CBP”) issued a second finding following its seizure of two of Top Glove’s shipments earlier in the month, and that Supermax may be excluded as a constituent of the FBM KLCI after just 6 months. Top Glove shares were down 4.1% week-on-week (w-o-w), while Supermax shares were down 10.9% w-o-w. 

Call warrant TOPGLOV-C1L made it into the top warrants list with 35.7mil units traded, while other warrants such as call warrant SUPERMX-C1Z and put warrant SUPERMX-HF also led the pack. TOPGLOV-C1L has relatively longer time to expiry as it expires on 8 October 2021, meaning it experiences relatively lower time decay i.e. lower holding costs for investors.

Meanwhile, the shares of D & O Green Technologies rebounded in recent weeks, buoyed further by the release of its first quarter results last Monday (24 May), reporting a revenue of almost double of last year’s quarter, with its net profit up almost 7 times year-on-year to RM29.7mil. After closing at RM4.20 on the previous Friday (21 May), it rose 6.9% over three days to RM4.49, before falling 4.7% on Friday to finish the week at RM4.28, 1.9% higher w-o-w. The call warrant D&O-CI saw 25.3mil units traded as it correspondingly rose 6.7% w-o-w. 

Given investors’ cautious sentiments on potentially stricter restrictions in the country, warrants over the Hang Seng Index (HSI) took up a larger percentage of turnover at 37% versus 27% in the previous week. The HSI had a good week, rising over 750 points on Tuesday and Wednesday, and securing most of its gains to end the week at 29,124.41 points, 2.3% higher w-o-w. 

As the HSI rose on Tuesday, investors net bought 11mil units and 4.5mil units of put warrants HSI-HGM and HSI-HGN respectively, and net sold call warrants HSI-CFK and HSI-CFP as they rose 60% and 35% respectively. In view of the public holiday on Wednesday, investors continued to accumulate the puts when market reopened Thursday. Last week’s movements placed all these HSI warrants in the top traded list, with put warrant HSI-HGM taking the crown at 79.1mil units traded.

Top warrants by volume traded:

Warrant nameVolume (mil.)IssuerExercise level/priceExpiry date
HSI-HGM79.1Macquarie26,00029 Jun 2021
HSI-HGN43.4Macquarie28,00029 Jun 2021
HSI-CFP36.0Macquarie31,60029 Jul 2021
TOPGLOV-C1L35.7Macquarie4.888 Oct 2021
HSI-CFK34.5Macquarie31,00029 Jun 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, kindl-y 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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macquarie structured warrants 20200914

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