Warrants Commentary (4 Jun to 8 Jun)
Warrants over the Hang Seng Index (HSI) continued to be the focus of investors as it racked up close to 74% of the total RM756.5 mil. traded last week. The HSI futures were positive for most of the week, with a strong 1.7% start on Monday. The volatile futures continued on its upward momentum up until Thursday, where it closed at 31,535, representing a 3.8% gain for the week. However, markets took a turn on Friday as investors were wary about the impact from the listings of Chinese big-cap “unicorn” companies and uncertainty over trade relations. The HSI ultimately closed up 1.5% week-on-week (w-o-w) to end the week at 30,840.
HSI warrants dominated the top 7 warrants for the week as investors switched between the call and put warrants. Among the popular warrants over the HSI, call warrant HSI-C3E emerged up top with a whopping RM145mil. traded. From Monday to Thursday, the warrant rose from RM0.395 to RM0.570, representing a 44.3% increase. On Friday, tracking the underlying closely, the warrant fell 23.7% to end the week at RM0.440. HSI-C3E is one of the most sensitive warrants over the HSI, as it moves 1 tick for every 28 points move in the HSI futures. This could be one of the key reasons why it was the top warrant for the week.
In single stock warrants, My EG Services Bhd (MYEG) remained in the spotlight as it continued on its rollercoaster run. The share price fell 20.4% to RM0.685 on Monday, but recovered to end the week at RM0.855, a mere 0.006% lower w-o-w. Among the many warrants over MYEG, MYEG-C40, with an exercise price of RM1.20, was the top warrant. MYEG-C40 remains the most liquid warrant, which generally makes it easier for investors to get in and out of trades without affecting the warrant’s price. On Friday itself, the warrant gained 20% to close at RM0.120, unchanged w-o-w.
Another warrant over single stocks that made the cut was SAPNRG-C65, a call warrant over Sapura Energy Bhd. The underlying share price recovered last week, gaining 8.5% w-o-w to close at RM0.635, whereas SAPNRG-C65 moved up 17.6% w-o-w to RM0.100.
Top 5 warrants by traded value:
|Issuer||Exercise level||Expiry date|
|HSI-C3E||144.9||Macquarie||31,800||30 Aug 2018|
|HSI-C3B||125.4||Macquarie||31,200||30 Jul 2018|
|HSI-H4E||123.9||Macquarie||29,400||30 Aug 2018|
|HSI-C3J||47.6||Macquarie||33,400||29 Nov 2018|
|HSI-H4C||36.3||Macquarie||30,200||30 Jul 2018|
To view the full list of structured warrants available on Bursa Malaysia, kindly visit malaysiawarrants.com.my.