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Supermax and HSI warrants in focus

Overall warrants turnover for the second week of August saw a huge drop, falling by 38.4% to RM1.03bil, mainly due to the sharp decline in trading activity of warrants over Malaysian shares which recorded a turnover of RM846.0mil, a 45.4% decrease from the week prior. Trading activity in the Hang Seng Index (HSI) warrants however surged with the turnover soaring 50.1% week-on-week (w-o-w) to RM186.5mil.
macquarie structured warrants 20200914

Overall warrants turnover for the second week of August saw a huge drop, falling by 38.4% to RM1.03bil, mainly due to the sharp decline in trading activity of warrants over Malaysian shares which recorded a turnover of RM846.0mil, a 45.4% decrease from the week prior. Trading activity in the Hang Seng Index (HSI) warrants however surged with the turnover soaring 50.1% week-on-week (w-o-w) to RM186.5mil.     

It was a rather choppy week for the US markets with the S&P 500® Index (SP500) almost hitting its all-time closing high since February, but fell short of a new peak, falling 0.8% last Tuesday before rebounding 1.4% the next day. However, the index fell a total 0.2% over the next two days, finishing the week at 3,372.85 on Friday. Meanwhile, the HSI had a strong upward momentum despite heightened US-China tensions and growing global economic risks. The index traded above the 25,000-level starting Wednesday and recorded a 2.7% rally w-o-w as it ended the week at 25,183.0, down 0.2% on Friday. 

Two call warrants i.e. HSI-C9U and HSI-C9T were the most active warrants over the HSI with a total of 144.8mil units and 81.3mil units traded, respectively. Investors were seen taking profit in these two warrants as they net sold 5.0mil units of HSI-C9U (+28.9% w-o-w) and 28.3mil units of HSI-C9T (+30.8% w-o-w) for the week. Investors should note that HSI-C9T is a shorter dated warrant and is expiring very soon on 26 August 2020. Warrants that are nearing expiry experience steeper time decay, which is an additional holding cost for investors as these warrants will lose their time value more rapidly. As a rule of thumb, a warrant loses one-third of its time value in the first two-thirds of its life, and two-thirds of its time value in the last one-third of its life. 

Meanwhile on the local front, glove counters traded in the negative territory following news of the approval of the first Covid-19 vaccine, Sputnik V, produced by Russia. Supermax slumped 21.8% w-o-w, trading below the RM20 mark and closing 8.0% lower at RM17.92, while Top Glove skidded 15.4% w-o-w, ending at RM23.82 last Friday.  Supermax call warrants i.e. SUPERMX-C97 and SUPERMX-C1A were in the top 5 most active warrants list, with investors trading a total 80.5mil units and 77.2mil units, respectively. 

Top warrants by volume traded:

Warrant nameVolume
(mil.)
IssuerExercise level/priceExpiry date
HSI-C9U144.8Macquarie27,00030 Oct 2020
HSI-C9T81.3Macquarie26,20028 Aug 2020
SUPERMX-C9780.5Maybank7.8826 Feb 2021
SUPERMX-C1A77.2CIMB9.0029 Jan 2021
HSI-CBB76.6Macquarie26,40027 Nov 2020

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..

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