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Record high volume seen trading HSI warrants

Warrants Commentary (2 Apr to 6 Apr)

The Hang Seng Index (HSI) had a wild swing last week despite only having three trading days for the week. On Tuesday, HSI futures closed 0.3% higher to 30,180.1 before plunging 2.5% to close below the 30,000 level. This was after the China government announced their plans to match President Trump’s tariff on USD50 bil in imported Chinese goods with import levies on US soybeans, cars and airplanes (CNNMoney, 4 Apr). On Friday, HSI futures rebounded on a strong note, up 1.5% to end the day.

Warrants over HSI futures repeated its domination in the warrants space with a jaw-dropping turnover of RM768.0 mil, representing 81.3% of the overall warrants turnover. Put warrant HSI-H4A was the top traded warrant for the week with RM86.2 mil traded. At the end of the week, investors took home 5.5 mil units of HSI-H4A. Meanwhile, bargain hunters also actively traded call warrant HSI-C1V as the warrant fell in tandem with the futures on Wednesday.

In the local market, for the first three days of the week, our local index futures fell 3.0% in total. It recovered 1.7% on Thursday before closing 0.1% lower on Friday. Among all warrants listed over KLCI, put warrant FBMKLCI-H4M was the most popular warrant with a total of RM11.7 mil units traded last week.

Oil and gas giant Sapura Energy’s share lost some momentum after its stellar performance in March. Last week, the share price ended at RM0.500, down 8.3% w-o-w. Call warrant SAPNRG-C64 took the center stage for single stock warrants once again with a total of RM11.4 mil traded last week. Bullish investors bought the call warrant as the Sapura Energy share price dipped into negative territory on Wednesday and took profit on their position the next day as the share price recovered. At the end of the week, investors net bought 5.9 mil units of SAPNRG-C64 which fell 17.6% w-o-w to RM0.07.

SAPNRG-C64 has an exercise price of RM0.500, the lowest among warrants listed over this stock. Warrants with lower exercise price typically have lower gearing level than warrants with higher exercise price. Therefore (all other factors held constant), they tend to be of lower risk than warrants with higher exercise price.

Top 5 warrants by traded volume:

Warrant name Value

(mil)

Issuer Exercise price (RM) / Exercise level Expiry date
HSI-C1V 87.7 Macquarie 30,000 30 May 2018
HSI-H4A 82.6 Macquarie 29,600 28 Jun 2018
HSI-H4C 70.8 Macquarie 30,200 30 Jul 2018
HSI-H2Y 61.3 Macquarie 29,000 30 May 2018
HSI-C3G 57.1 Macquarie 29,600 27 Sep 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.

Article by Macquarie Warrants (M)

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