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Warrants over Malaysian shares gain attention

Warrants Commentary (15 July to 19 July)

Last week was a quieter week for the warrants market, with turnover clocking in at RM400mil, 7.6% lower than the previous week, due to lower volumes throughout. However, we saw heightened activity in selected warrants over Malaysian shares, namely Ekovest and Petronas Chemical (PCHEM), while warrants over My E.G. Services (MYEG) remained popular.

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HSI-C5P and MYEG-C68 stole the limelight

Warrants Commentary (8 July to 12 July)

The Malaysia warrants market recorded a turnover of RM432.5mil. last week, 13.9% higher than the preceding week. Warrants over the Hang Seng Index (HSI) continued to be investors’ favourite with RM317.1mil. traded, mainly driven by the increased volatility in Asia’s most active stock market.

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G20 meeting boosts market sentiment for HSI

Warrants Commentary (1 July to 5 July)

Last week, despite the protests occurring in Hong Kong on its public holiday in conjunction with the HKSAR Establishment Day on Monday, the Hang Seng Index (HSI) had a strong rally, trading above the 28,000 level when it reopened from the long weekend.  Market sentiments were boosted after the US-China meeting at the Group of 20 (G20) Summit last Saturday, which ended with a truce as both parties agreed to resume talks that have stalled since May. The meeting saw Trump putting on hold the additional tariffs on USD300bil. worth of Chinese products which he had earlier threatened.

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TM and MYEG draw attention as investors await G20 outcome

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. 

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Volatility continues as trade war intensifies

Warrants Commentary (17 June to 21 June)

Last week, President Trump announced on a Twitter post that Chinese leader Xi Jinping has agreed to meet with him at the G20 summit in Japan.  The announcement acted as a catalyst for the Hang Seng Index (HSI) futures, pushing it up 702 points or 2.6% on Wednesday to close at 28,146. On Thursday, riding on the same momentum, the HSI futures gained an additional 1.3% to 28,515, before closing 0.3% lower to end the week at 28,422 points. Week-on-week, the HSI futures rallied 5.1%, the highest gains since November last year.

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TM-C41 took over the stock warrant space

Warrants Commentary (27 May to 31 May)

The Malaysian warrants market was revived last week following the shorter trading week in the preceding week, sporting a turnover of RM452.5mil, 63.0% higher than the preceding week. Telecommunications giant Telekom Malaysia (TM) reported a net profit of RM308.3mil for the first quarter ended 31 March  2019, almost doubling the net profit of RM157.2mil for the same period a year ago. The sizable growth can be attributed to a reduction in TM’s operating costs. The share price of TM soared 27.2% following the positive news to close at RM3.46 on Thursday (30 May), the highest level since August 2018. Call warrant TM-C41 was the most notable warrant over TM with RM3.0mil traded on Thursday (30 May) and a total RM7.7mil traded last week. TM-C41 tracked the underlying price movement closely, gaining a substantial 267.7% week-on-week (w-o-w).

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HSI warrants actively traded despite shorter week

Warrants Commentary (20 May to 24 May)

The Hong Kong’s Hang Seng Index (HSI) extended its third week of decline as the trade dispute between US and China escalated to another level. Recently, the Trump administration restricted US technology sales to Huawei and several other foreign-owned companies, based on Trump’s claim that the Chinese telco giant poses a national security risk (Market Watch, 20 May). Following this, Huawei was added into the US’ “entity list”, which bans the company from acquiring technology from US firms without prior government approval.

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US-China trade battle churns markets

Warrants Commentary (13 May to 17 May)

The Hong Kong market was closed last Monday (13 May) in conjunction with the Birthday of the Buddha holiday. Upon reopening, the Hang Seng Index (HSI) futures plunged 1.7% to 27,858 points as markets churned when China retaliated against the US by raising tariffs on USD60bil in US goods to 25%. Though the HSI futures then rebounded 0.8% in total over Wednesday and Thursday, the rally failed to take hold as the futures fell 1.3% on Friday to finish the week at 27,730 points, down 2.1% week-on-week (w-o-w). Warrants over the HSI took up a good 81.5% of turnover for the week, despite having a slightly shorter trading week.

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Turbulent week for the HSI futures as tariffs loomed

Warrants Commentary (6 May to 10 May)

It was a volatile week for the Hang Seng Index (HSI) futures as markets tried to price in the US’ imposition of higher tariffs on US$200bil. of Chinese imports.  The HSI futures plunged 3.0% on Monday, its worst decline since 23 October 2018. After a small rebound on Tuesday, the futures continued on its descend with a 1.1% and 2.7% decline on Wednesday and Thursday, respectively.  On Friday, after the tariff hike on $200bil. worth of Chinese goods to 25% has been confirmed, the HSI futures took a plunge to below the 28,000 level, before rebounding to close at 28,327, representing a week-on-week (w-o-w) decline of 5.1%.

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