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HSI warrants active in the face of volatile markets

Warrants Commentary (19 Mar to 23 Mar)

The markets were volatile last week from concerns of the trade war between the U.S. and China, resulting in a whopping 1.63B units of warrants traded, valued at RM302.2M. As the Hang Seng Index (HSI) futures fell 4.1% week-on-week (w-o-w) from 31,450 to 30,147 points, HSI warrants dominated the warrants space, comprising 65.8% of total warrants turnover. The top five warrants in value traded were all HSI warrants with a good mixture of calls and puts, although HSI puts came up on top.

Put warrant HSI-H4A was the top traded warrant for the week with RM73.4M traded. At the end of the week, investors sold back 3.5M units of HSI-H4A, which gained a whopping 43.2% w-o-w. As the HSI fell towards the end of the week, investors took profit on the put warrants and started to accumulate call warrants. Call warrants gain in value as the underlying increases, whereas put warrants gain in value as the underlying declines, potentially allowing investors to profit from both a long or short view.

On single stocks, Sapura Energy’s share price enjoyed some relief last week as the oil and gas support services provider secured a contract from Mubadala Petroleum to build an integrated gas processing platform facility on the offshore waters of Sarawak. The share price closed up 8.3% to RM0.520 last Wednesday (21 Mar) and gained another 3.8% to RM0.540 on Thursday (22 Mar) as investors reacted to the news. The share price ended the week at RM0.550, up 14.6% w-o-w.

SAPNRG-C58 was the top traded single-stock warrant in terms of volume with 96.5M units traded. Bargain hunters who have earlier accumulated this warrant can be seen taking profit in the second half of last week as the warrant bid price jumped 75% w-o-w to RM0.035.

Another single-stock warrant, HENGYUAN-CM, was also active as its underlying shares Hengyuan Refining fell 11.2% w-o-w to RM7.80. The warrant saw 54.8M units changing hands last week. Hengyuan has not been having a good year as the share price is down 52.1% year-to-date. Hengyuan’s share price rallied the whole of last year, hitting a high of RM19.20, but has since been on a steep decline.

Top 5 warrants by turnover:

Warrant name Volume

(mil)

Issuer Exercise price (RM) / Exercise level Expiry date
HSI-H4A 116.5 Macquarie 29,600 28 Jun 2018
SAPNRG-C58 96.5 Macquarie 0.880 30 Aug 2018
HSI-C1X 73.1 Macquarie 32,000 28 Jun 2018
HSI-C3C 67.7 Macquarie 34,000 30 Jul 2018
HSI-H2W 60.9 Macquarie 28,400 27 Apr 2018

 

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.

 

Newly listed warrants

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