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FGV-C63 took the crown among stock warrants again

Warrants Commentary (22 to 25 Jan)

Last week’s warrants turnover came in at RM248.2mil, 31.2% lower than the previous week on a slower market, and also due to a shorter trading week with the Thaipusam holiday last Monday. One of the hot stocks last week were shares of FGV Holdings (FGV), with more than 189.0mil shares traded. On Tuesday, the share price opened higher but closed at the day’s low of RM0.930. The fortune of FGV shares was reversed on Wednesday and Thursday, gaining a whopping 13 cents or 13.9% to close at a 2-month high of RM1.06. However, FGV erased part of its gains for the week to close at RM1.02 on Friday, still up 6.8% week-on-week (w-o-w).

Again, warrants over FGV continued to be the hottest single stock warrant last week, representing 8.7% of total warrants turnover. Among the warrants over FGV, call warrant FGV-C63 was investors’ favourite, ending the week with RM13.1mil traded. This warrant has the highest effective gearing of 3.0x among all FGV call warrants with more than 4 months to expiry. With an effective gearing of 3.0x, this warrant will move approximately 3.0% for every 1% change in its underlying price (all other factors held constant). The bid price of FGV-C63 surged 11.8% w-o-w to finish the week at RM0.130.

In other news, just as investors thought the worst was over for Genting Malaysia (GENM), Fox’s units decided to file a counter claim of USD46.4mil against GENM’s suit against them on the breach of contract last year. The share price of GENM tumbled 3.6% w-o-w to RM3.18 last Friday. Call warrant GENM-C46 was the most popular GENM warrant with RM3.2mil traded last week.

Meanwhile, the Hang Seng Index (HSI) futures traded relatively flat from Monday to Thursday last week. However, the same cannot be said for Friday, which saw the HSI futures surging 1.9% to end the week at 27,602.0 points. Put warrant HSI-H4X emerged as the most active warrant with RM39.5mil transacted over the week. The warrant tumbled 33.3% w-o-w to finish the week at RM0.270. Put warrants move in an inverse direction to the underlying, gaining in value as the underlying falls and vice versa.

Top stock warrants by value traded:

Warrant name Turnover
(RM’mil)
Issuer Exercise price (RM) Expiry date
FGV-C63 13.1 Macquarie 0.95 28 Jun 19
FGV-C64 3.2 RHB 0.78 30 Aug 19
GENM-C46 2.5 Macquarie 3.40 31 Jul 19
VS-C9 2.3 Kenanga 0.88 2 Aug 19
TOPGLOV-C43 2.1 Kenanga 5.88 17 Jun 19

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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.