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FGV-C63 stole the limelight as underlying rose 11.0% w-o-w

Warrants Commentary (14 to 18 Jan)

Last week, the structured warrants market was still sluggish to fire up in the new year. Weekly warrants turnover came in at RM361.3mil, averaging about RM72.3mil daily. However, last week’s traded value was 3.9% of the broader market, higher than 3.3% in the previous week.

Last Tuesday (15 Jan), the chairman of FGV Holdings (FGV), Datuk Azhar Abdul Hamid, wrote an unprecedented letter to shareholders – filed with Bursa Malaysia – listing the problems faced by FGV that led to its decline in market capitalization, and its plans for a turnaround. As one of the ways to carry out its plans, FGV has identified non-core businesses and assets valued at RM350mil for disposal.

Following the news, FGV shares gained 13.4% in one day to close at RM0.930 last Tuesday. The call warrant FGV-C63 saw a 42.9% rise to RM0.100 on that day, and was the most popular warrant over Malaysian shares for the day, and consequently for the week. FGV shares rose slightly for the rest of the week, ending the week at RM0.955, up 11.0% week-on-week (w-o-w), as investors were optimistic with FGV’s upcoming announcement on its new group chief executive officer.

In other news, the Hang Seng Index (HSI) finished another healthy week, up 1.6% w-o-w to 27,090.8 points, as the market was positive from news that the US is considering lifting Chinese tariffs in a bid to work out a trade deal between the two countries. The HSI started the week poorly with a 1.4% decline to 26,298.3 points, but rose 2.3% over the next two days to 26,902.1 points. After a slight dip on Thursday (17 Jan), the index pulled through, rising 1.3% on Friday to break through the 27,000 level.

Put warrants over the HSI were popular with investors last week. The put warrant HSI-H6A took the crown as the top traded warrant with a turnover of RM159.3mil. Investors collected all 36.5mil units of this warrant, which was sold out by the end of the week. Put warrants move in an opposite direction to the underlying, meaning most investors are expecting the HSI to fall following its meteoric rise over the past weeks, as it has risen a good 4.8% year-to-date.

 

Top 5 warrants by volume traded:

Warrant name Turnover
(mil)
Issuer Exercise level/

Exercise price (HKD)

Expiry date
HSI-H6A 159.3 Macquarie 23,400 29 Apr 19
HSI-H4X 123.5 Macquarie 25,600 28 Mar 19
A50CHIN-C32 120.2 Macquarie 12.50 28 Jun 19
HSI-C5B 114.1 Macquarie 27,800 29 Apr 19
HSI-H4O 81.3 Macquarie 25,400 30 Jan 19

 

If you have any questions or need further assistance, please do not hesitate to contact us via our hotline at 03-2059 8840 or email us at info@malaysiawarrants.com.my.

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.