Warrants Commentary (20 to 24 Aug)
Once again, structured warrants over the volatile Hong Kong Hang Seng Index (HSI) were favored by investors last week, due in part to the slower week on the local front in view of the Hari Raya Haji public holiday and the school holidays. The volatile futures regained 1.7% week-on-week (w-o-w) to close at 27,595 last Friday after suffering a steep 3.8% w-o-w decline the previous week. The futures gained 2.6% over the first three days of the week to close at 27,855 on Wednesday, before shaving some of its gains on Thursday and Friday.
The top ten traded warrants last week were all HSI warrants, consisting of seven HSI call warrants and three HSI put warrants. Call warrants move in tandem with the underlying HSI futures, increasing in value as the futures increased. Investors took profit on a total of 118.5mil. units of HSI calls. HSI-C3Q emerged as the top traded warrant with 186.1mil. units traded, though only 1.7mil. units were net sold by investors over the week. The warrant bid price gained 13.0% w-o-w to end the week at RM0.565.
On the other hand, put warrants move in an opposite direction to the underlying futures, decreasing in value as the futures increased. Put warrant HSI-H4I was one of the most popular warrants for the week with 84.1mil. units or RM53.4mil. traded. Bargain hunters took home 8.3mil. units of this warrant as its bid price fell 17.5% w-o-w to close at RM0.635 on Friday.
For single stocks, warrants over My EG Services (MYEG) were most popular with investors. Call warrant MYEG-C46 was the top traded single stock warrant with RM4.0mil. traded. The share price had a stellar week, gaining three out of the four trading days last week for a 12.5% gain w-o-w, closing at RM1.35. The warrant bid price gained 21.7% w-o-w to RM0.140.
Further, the call warrant over Hibiscus Petroleum, HIBISCS-CG, also drew investors’ attention as its underlying share price also gained three out of the four trading days last week, rising past the RM1.00 level to closing unchanged at RM1.02 on Friday, up 8.5% w-o-w. Bullish investors collected 5.4mil. units of this warrant over the past week. The warrant bid price gained 23.5% w-o-w to close at RM0.105.
Top 5 warrants by traded value:
|Issuer||Exercise level||Expiry date|
|HSI-C3Q||104.2||Macquarie||29,200||30 Jan 2019|
|HSI-C3P||58.4||Macquarie||30,200||30 Jan 2019|
|HSI-H4I||53.4||Macquarie||27,800||30 Oct 2018|
|HSI-C3S||28.0||Macquarie||30,400||27 Feb 2019|
|HSI-H4O||25.7||Macquarie||25,400||30 Jan 2019|
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