Warrants Commentary (24 June to 28 June)
Trading in structured warrants over Malaysian shares grew a fair share this week; top names include Telekom Malaysia (TM) and My EG Services (MYEG). Warrants over shares comprised 22.8% of turnover (RM101.5mil) last week, compared to 15.4% (RM89.2mil) in the previous week. However, trading in warrants over the Hang Seng Index (HSI) and iShares China A50 Index ETF slowed last week, though they still comprised 72.7% and 4.0% of turnover, respectively.
The top warrant over shares last week was once again the call warrant over TM, TM-C41, with 39.6mil units traded. TM was in the spotlight in June as its share price soared following the release of its better-than-expected results for the first quarter ended 31 March 2019. TM shares are up 10.8% month-to-date (MTD), while TM-C41’s warrant price is up 42.9% MTD. Meanwhile, TM-C47, a warrant that was listed last Tuesday, saw 16.5mil units traded. This warrant has an exercise price of RM4.00, the highest among all TM warrants listed on Bursa Malaysia.
Meanwhile, MYEG shares have been rocky this past week. The shares fell 3.4% on Monday but clawed its way back to end the week 1.4% higher week-on-week. Call warrant MYEG-C68 saw 37.8mil units traded, while MYEG-C65 was the second most popular MYEG warrant with 21.8mil units traded. Between the two, MYEG-C68 has a higher effective gearing level of 3.5 times compared to MYEG-C65’s 3.3 times, as MYEG-C68 has a higher exercise price of RM1.85 compared to MYEG-C65’s RM1.50.
As for warrants over foreign indices, investors stood on the sidelines as they await the G20 summit. At the time of writing, the trade talk between Trump and Xi was done early Saturday, with the US saying the outcome was “better than expected”, and China saying that the US has agreed not to impose any further tariffs on Chinese goods.
Two call warrants over the HSI, HSI-C5J and HSI-C5P, were at the top of the list with 278.7mil and 234.9mil units traded respectively, despite the HSI rising only 0.2% over the week to close at 28,542.6 points. Investors should note that HSI-C5J expires at the end of July, and exercise caution as a warrant’s time value will decay at the quickest rate in the last one-third of its life.
Top stock warrants by volume traded:
|Issuer||Exercise price||Expiry date|
|TM-C41||39.6||Macquarie||3.50||30 Sep 2019|
|MYEG-C68||37.8||Macquarie||1.85||31 Oct 2019|
|EKOVEST-CX||28.9||Maybank||0.880||30 Apr 2020|
|TM-C40||24.0||RHB||3.10||23 Oct 2019|
|TM-C46||23.0||RHB||3.80||23 Jan 2020|
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To view the full list of structured warrants available on Bursa Malaysia, kindly visit malaysiawarrants.com.my.
Provided for Malaysian residents information only. 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.