Warrants Commentary (18 Jun to 22 Jun)
Global equities recorded one of their worst performances in 2018 last week as trade war tensions between the world’s two largest economies continued to escalate. On 15 June, U.S. President Donald Trump’s administration announced that Chinese goods worth USD36bil. will be subject to 25% tariffs effective 6 July. China swiftly responded, saying that it will impose tariffs on U.S. goods on the “same scale and same strength” (CNBC, 15 Jun). The U.S. later threatened to impose tariffs on an additional USD200bil. worth of Chinese goods, unless Beijing ceases its “unfair practices” (Economic Times, 19 Jun).
The warrants market saw RM594.2mil. traded last week, up 39.7% from the prior week. Warrants over the Hang Seng Index (HSI) and the FBM KLCI dominated the warrants space, comprising 82.3% of total warrants turnover.
The HSI tumbled 2.8% to 29,468.2 points on Tuesday (19 Jun), breaching the 30,000 level upon reopening after Hong Kong’s public holiday on Monday. It rebounded 0.8% on Wednesday, fell another 1.4% on Thursday and gained 0.2% on Friday to end the week at 29,338.7 points, down 3.2% week-on-week (w-o-w).
Put warrant HSI-H4B topped the chart with RM76.1mil. traded, with investors as net sellers. Investors took profit on this warrant on Tuesday when its bid price gained a whopping 37.5%. Meanwhile, call warrant HSI-C3H also saw a surge in trading last week. Bargain hunters took home 13.9mil. units of the 179.2mil. units traded.
Local benchmark index FBM KLCI could not escape further decline last week. The FBM KLCI closed in the negative territory for the first four days of the week, losing a cumulative 3.9% as Thursday marked its ninth consecutive day of decline. It took a breather from the selling pressure on Friday, closing 0.11% higher to 1,694.2 points, down 3.8% w-o-w. Among all warrants over the FBM KLCI, put warrants FBMKLCI-H4P and FBMKLCI-H4R were top traded, with RM13.1mil. and RM6.9mil. traded, respectively.
For single stocks, electronic government services provider My E.G. Services (MYEG) remained as investors’ favourite as the share price gained 3.6% w-o-w to close at RM1.00 on Friday, despite weakness in the broader market. Call warrant MYEG-C40, which expires in December 2018, was the most popular warrant with 42.1mil. units changing hands last week.
Top 5 warrants by traded value:
|Issuer||Exercise level||Expiry date|
|HSI-H4B||76.1||Macquarie||28,800||30 Jul 2018|
|HSI-C3H||72.6||Macquarie||31,400||30 Oct 2018|
|HSI-H4I||62.2||Macquarie||27,800||30 Oct 2018|
|HSI-C3K||58.2||Macquarie||32,000||29 Nov 2018|
|HSI-C3F||48.1||Macquarie||31,000||27 Sep 2018|
To view the full list of structured warrants available on Bursa Malaysia, kindly visit malaysiawarrants.com.my.