Follow Us For The Latest Updates

Follow Us For The Latest Updates

Trading in HSI warrants lower despite HSI’s 1.7% recovery

Warrants Commentary (19 August to 23 August)

Last week, the Hang Seng Index (HSI) showed a recovery, trading above the 26,000 level for the whole week, which was supported by Beijing’s plan to reform its interest rate system and lower borrowing costs (Bloomberg, 19 August). On Tuesday (20 August), China made its first move to implement a long-awaited change to its interest rate policy by lowering its lending reference rate to 4.25%  through a new market-oriented pricing mechanism. This move would result in cheaper borrowing costs for companies, providing a modest easing of monetary conditions in China’s economy amid the trade war with the United States.

The HSI moved in a strong positive momentum last Monday and had its biggest daily gain recorded in two months as the index jumped 2.2% to close at 26,291.8 points. For the rest of the week, the HSI had a yo-yo movement with the index slipping 0.2% on Tuesday before rebounding 0.2% the day after. On Thursday, the HSI tumbled 0.8% again amid uncertainty over future Federal Reserve rate cuts but it managed to rebound again to close 0.5% higher at 26,179.3 points ahead of the weekend. Week-on-week (w-o-w), the HSI rose 1.7%. 

Trading in HSI warrants was a bit slower than the previous week despite a slightly more bullish and supported market. Overall, warrants over the HSI contributed 74.6% of the overall warrants turnover of RM420mil. The HSI put warrant, HSI-H6P was in the spotlight last week, emerging as the most actively traded warrant among investors, with its trading volume recording the highest at 227.1mil. units. Investors net sold 1.9mil. units of this warrant which fell 37.7% w-o-w. Meanwhile, the HSI call, HSI-C7F came in second with investors changing hands for 153.1mil. units. 

On the local front, last Friday, DRB-HICOM announced that its financial results returned to the black. Its 1Q19 revenue jumped 29.5% to RM3.44bil. which is mainly contributed by improved sales in the automotive sector. DRB-HICOM’s share price surged 1.7% to RM2.95 last Friday an 8.5% gain w-o-w. DRBHCOM-C81 was the most notable warrant as investors traded 22.0mil. units, while DRBHCOM-C75 had investors trading 20.1mil. units throughout the week. 

Top warrants by volume traded:

Warrant nameVolume
IssuerExercise levelExpiry date
HSI-H6P227.1Macquarie24,80027 Sep 2019
HSI-C7F153.1Macquarie27,40030 Dec 2019
HSI-H6Q109.5Macquarie26,20027 Sep 2019
HSI-C7E90.6Macquarie29,20030 Dec 2019
HSI-H8E70.0Macquarie24,60030 Dec 2019

If you have any questions or need further assistance, please do not hesitate to contact us via email us at [email protected]

To view the full list of structured warrants available on Bursa Malaysia, kindly visit

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.


Share on facebook
Share on twitter
Share on linkedin
Share on telegram

More Posts

technical focus

Technical Focus – O&G

In the latest OPEC meeting, OPEC and its allies have collectively cast aside proposals for expanding output and decided to keep production in lid by sticking with current quotas for April 2021. The unexpected move has led to a tighter production has subsequently sent oil prices to their highest level since January 2020. We reckon that the move bodes well for oil & gas players, capitalising on the recent recovery with Brent oil prices surging towards the USD70/bbl. Back home, the higher CAPEX allocation at RM40-45bn by PETRONAS for 2021 (compared to RM33.4bn spent in 2020) is also welcoming for domestic oil & gas players.

market pulse

Back above 1,600

Last Friday, the FBM KLCI bucked the losses on Wall Street and surged above the 1,600 psychological level; the continued buying interest in banking heavyweights after BNM’s decision to remain the OPR, coupled with the gains in energy stocks spurred the key index rally. We reckon the positive momentum of the key index to continue as the rallies in the banking sector may indicate market’s hope for economic recovery. Meanwhile, the Brent oil price continued seeing its uptrend after OPEC and its allies decided to keep production steady through April.

macquarie structured warrants 20200914

Good demand for HSI and KLCI warrants amid volatile market

Overall warrants turnover for the first week of March increased slightly by 3.2% week-on-week (w-o-w) to RM419.3mil, mainly driven by the increased trading activity in warrants over the Hang Seng Index (HSI) and FBM KLCI Index (KLCI) with both contributing a total of 34.5% of the total warrants turnover.

market pulse

Still within consolidation mode

The FBM KLCI settled in red in tandem with the regional peers as selling pressure in the glove stocks returned, offsetting the gains on the banking heavyweights following the unchanged Overnight Policy Rate (OPR) by Bank Negara Malaysia. Tracking the losses on Wall Street overnight, we expect the local bourse may continue to consolidate further as market players are likely to trade on a cautious tone on the broader market. Nevertheless, we expect traders to position themselves for the recovery theme as Covid-19 vaccination is taking place. Meanwhile, the Brent oil price has surged firmly above USD65.