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Investors’ attention focused on selected names

Warrants Commentary (9 Apr to 13 Apr)

The share price of oil and gas support services provider Sapura Energy rose every day last week, with the biggest surge occurring on Wednesday (11 Apr) as it was up 20.6% to RM0.645 on news that it will move ahead with the development of gas fields off Sarawak with partners Petronas Carigali and Sarawak Shell. The shares ended the week at RM0.735, up 47% week-on-week (w-o-w).

Call warrant SAPNRG-C64 dominated the single-stock warrants space for the third consecutive week as it saw RM63.0M traded last week. The warrant price surged a whopping 113% w-o-w to end the week at RM0.160. With structured warrants, investors can gain similar effective exposure to an underlying for a fraction of the share price, thus requiring a much smaller capital outlay.

Warrants over Hengyuan Refining (Hengyuan) were also popular last week as the share price rose 11.1% w-o-w to finish the week at RM9.28. Call warrant HENGYUAN-CH emerged as the second most active warrant last week with RM48.4M traded. HENGYUAN-CH has an exercise price of RM8.00, which is 13.8% below the share price and one of the lowest among all warrants listed over Hengyuan.

In other news, the Hang Seng Index (HSI) rallied for the first half of the week as the index rose a total of 3.5% from Monday to Wednesday, in line with the rally in global equity markets as concerns on the escalating trade dispute between China and the U.S. eased following Chinese President Xi Jinping’s promise to cut import tariffs. Although the HSI dipped a collective 0.3% on Thursday and Friday, it ended the week in the green, up 3.2% w-o-w to 30,808.38.

As the HSI and its futures went on its hike, investors actively traded put warrant over the HSI futures, HSI-H4A, which emerged as the top traded index warrant for the fifth consecutive week, with RM40.6M traded. At the end of the week, investors took home 7.4M units of this warrant, resulting in an inventory remaining of 5.0M units. In view of the recent volatility of the HSI, call warrant HSI-C3B was also actively traded, with RM31.1M worth changing hands last week.

 

Top 5 warrants by traded value:

Warrant name Value

(RM’mil)

Issuer Exercise price (RM) / Exercise level Expiry date
SAPNRG-C64 63.0 Macquarie 0.500 31 Oct 18
HENGYUAN-CH 48.4 CIMB 8.00 29 Jun 18
HSI-H4A 40.6 Macquarie 29,600 28 Jun 18
HSI-C3B 31.1 Macquarie 31,200 30 Jul 18
HSI-H2Z 19.0 Macquarie 28,200 2 Jun 18
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

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