Warrants Commentary (1 Apr to 5 Apr 2019)
Once again, the call warrants over My E.G. Services (MYEG) were actively traded as the shares continued to be volatile with the various news headlines surrounding it. Last Wednesday (3 Apr), MYEG’s share price fell 2.7% to RM1.42 following the cabinet committee’s statement that MYEG, along with a few other companies, are under review for monopolistic ways.
However, the shares rebounded sharply on Thursday, rising a good 7.8% to RM1.53. Also on Thursday, the company released an announcement on Bursa Malaysia that they have invested 10mil. yuan (RM6.1mil. equivalent) in China based education technology group Jingle Magic. The shares closed unchanged at RM1.53 on Friday, up 8.5% from RM1.41 a week ago.
Call warrant MYEG-C65 took over the mantle last week, emerging as the top warrant over Malaysia shares with RM6.8mil. traded. The warrant bid price fell 7.4% on Wednesday, then surged 20.0% to RM0.150 on Thursday. The warrant closed the week at RM0.150, up 20.0% week-on-week (w-o-w). MYEG-C65 has an effective gearing of 2.3 times as of the time of writing, which means this warrant tends to move approximately 2.3% for every 1% move in the underlying (all other factors held constant).
In the meantime, the Hang Seng Index (HSI) had a good week, rising 3.0% w-o-w to end the week at 29,936.3 points. Do note that the Hong Kong market was closed on Friday for the Ching Ming Festival public holiday. Warrants over the HSI once again dominated the warrants market, constituting 59.9% of value traded despite having a shorter trading week. The HSI rose 3.2% over the first three days of last week, before falling a slight 0.2% on Thursday.
The call warrant HSI-C5A was the most active warrant for the second consecutive week. The warrant bid price rose a whopping 55.9% from Monday to Wednesday, and ended Thursday at RM0.535. Do note that the HSI-C5A will expire on 29 April 2019, meaning that it will experience higher time decay as the time decay speeds up as it gets closer to its expiry date. For a longer exposure to the HSI, investors may consider choosing longer dated warrants
Top warrants by value traded:
|Issuer||Exercise level||Expiry date|
|HSI-C5A||64.0||Macquarie||29,200||29 Apr 2019|
|HSI-C5D||61.0||Macquarie||30,000||30 May 2019|
|HSI-H6G||32.8||Macquarie||28,000||30 May 2019|
|HSI-C3Z||16.9||Macquarie||30,600||29 Apr 2019|
|HSI-C5G||16.3||Macquarie||29,400||27 Jun 2019|
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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.