Despite the holiday-shortened week, total warrants turnover last week only fell 0.7% to RM198.2mil as the average daily turnover rose from RM39.3mil per day in the previous week to RM49.6mil per day last week. With calls and puts over indices available on Bursa, bullish or bearish investors may gain leveraged exposure to the broader markets.
Malaysians react to the Budget 2022 announced the previous Friday (29 Oct), with a notable corporate news being the implementation of Cukai Makmur, a one-off prosperity tax on companies with annual taxable income of more than RM100mil, where the usual 24% income tax will be implemented on the first RM100mil income, while the excess will be subjected to a 33% income tax. In addition, the government announced a stamp duty increase for share trading in 2022 from 0.1% to 0.15% along with the removal of the cap of RM200 per transaction.
The FBM KLCI fell 2.0% on Monday (1 Nov) as investors digested the news, and the index failed to recover through the week, ending the week at 1,531.73 points, 2.0% lower week-on-week (w-o-w). Warrants over the FBM KLCI took up 1.3% of last week’s turnover. Among the local stock underlyings that saw increased attention was Dagang NeXchange – its shares saw a volatile week with a 1.3% decline on Monday, a 7.1% surge on Tuesday and a 4.9% decline on Wednesday before closing unchanged at RM0.785 on Friday. Call warrant DNEX-CG with an exercise price of RM1.20 landed third on the top traded list with 81.5mil units traded. Other than that, warrants over Dialog, Genting Malaysia and CTOS Digital also saw interest.
Meanwhile, warrants over the Hang Seng Index (HSI) continue to take up a majority of turnover at 66.1% or RM131.0mil as the HSI saw another week of decline, ending the week at 24,870.51 points, 2.0% lower w-o-w. Call warrant HSI-CIV (expires 28 January 2022) was the top traded warrant by volume at 170.0mil units, while put warrant HSI-HMD (expires 29 November 2021) was the top traded warrant by turnover at RM53.3mil. Among the Hong Kong stock underlyings, warrants over Meituan, Cansino, Tencent and BYD were popular among investors.
Top warrants by volume traded:
|Warrant name||Volume (‘mil.)||Issuer||Exercise level/price||Expiry date|
|HSI-CIV||170.0||Macquarie||26,600||28 Jan 2022|
|HSI-HMD||98.7||Macquarie||25,600||29 Nov 2021|
|DNEX-CG||81.5||Kenanga||1.20||30 May 2022|
|HSI-CIL||77.0||Macquarie||27,000||29 Nov 2021|
|HSI-CIU||54.8||Macquarie||28,600||28 Jan 2022|
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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.