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Equity markets end the week in the green

Warrants Commentary (23 Jul to 27 Jul)

Global equities had a turnaround performance last week, driven by strong earnings reported by US tech companies such as Google parent Alphabet, Biogen and others. Further, last Wednesday, President Trump and European commission president Jean-Claude Juncker agreed to start talks in reducing tariffs and other trade barriers related to industrial goods, apart from cars and car parts (Financial Times, 26 July). The S&P 500 Index was up 1.3% from the previous Friday to 2,837.4 points (at the time of writing).

Last week, the warrants market saw a good turnover of RM870.4mil., down 6.5% from the week prior. The Hang Seng Index (HSI)  took a breather as trade tensions between the US and Europe eased for the time being. The HSI closed positive for the first three days of the week, gaining a total of 2.5% or 696.5 points to close at 28,920.9 points on Wednesday. The index then fell 0.5% on Thursday and gained a slight 0.1% on Friday, ending the week at 28,804.3 points, up 2.1% week-on-week (w-o-w).

The HSI warrants once again dominated the warrants market space with a turnover of RM745.5mil., making up 85.6% of total warrants turnover. Call warrant HSI-C3N (January 2019 expiry) topped the chart with RM116.5mil. traded last week. Investors took profit on this warrant on Tuesday and Wednesday as the underlying rose, selling back 4.1mil. units before accumulating again on Thursday. Other than that, call warrants HSI-C3I (October 2018 expiry)  and HSI-C3O (January 2019 expiry) were also heavily traded, taking up the second and third spots on the top traded list. At the end of the week, investors net sold 8.7mil. units of HSI-C3I and 1.4mil. units of HSI-C3O.

Meanwhile, bargain hunters who hope to benefit from a downward movement in the HSI collected the HSI put warrants, resulting in HSI-H4G (September 2018 expiry) also being popular with investors. The put warrant moved in an opposite direction to the underlying, closing 19.2% lower w-o-w to RM0.590 on Friday.

For warrants over single stocks, SAPNRG-C64, a call warrant over Malaysian oil and gas player Sapura Energy Berhad (SAPNRG), emerged as the top traded single stock warrant last week with RM4.4mil. traded, as the underlying gained 3.4% w-o-w to RM0.605 on Friday. Investors were net sellers of this warrant, selling back 4.7mil. units throughout the week as the warrant bid price rose 13.3% w-o-w to RM0.085.

Top 5 warrants by traded value:

Warrant name

Value
(RM’mil.)
Issuer Exercise level Expiry date

HSI-C3N

116.5

Macquarie

32,200

30 Jan 2019

HSI-C3I

103.3 Macquarie 30,000 30 Oct 2018

HSI-C3O

94.6 Macquarie 31,200

30 Jan 2019

HSI-H4G

86.6

Macquarie 28,600

27 Sep 2018

HSI-C3P 52.5 Macquarie 30,200

30 Jan 2019

 

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.

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