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TM-C41 took over the stock warrant space

Warrants Commentary (27 May to 31 May)

The Malaysian warrants market was revived last week following the shorter trading week in the preceding week, sporting a turnover of RM452.5mil, 63.0% higher than the preceding week. Telecommunications giant Telekom Malaysia (TM) reported a net profit of RM308.3mil for the first quarter ended 31 March  2019, almost doubling the net profit of RM157.2mil for the same period a year ago. The sizable growth can be attributed to a reduction in TM’s operating costs. The share price of TM soared 27.2% following the positive news to close at RM3.46 on Thursday (30 May), the highest level since August 2018. Call warrant TM-C41 was the most notable warrant over TM with RM3.0mil traded on Thursday (30 May) and a total RM7.7mil traded last week. TM-C41 tracked the underlying price movement closely, gaining a substantial 267.7% week-on-week (w-o-w).

Meanwhile, low cost carrier AirAsia Group (AirAsia) was another Malaysian listed company that made headlines last week. The company posted a 92.0% drop in net profit to RM96.1mil for the first quarter ended 31 March 2019, but declared a record-high special dividend of 90 sen per share. AirAsia shares extended their 5 days of gain to close at RM2.89 last Friday, posting the best weekly performance in the last 6 months. Call warrant AIRASIA-C83 came in second to TM-C41 on the top traded stock warrant list with a RM4.39mil turnover. On Thursday and Friday, we saw investors selling back a total of 1.8mil units of AIRASIA-C83 as the bid price surged 88.9% w-o-w.

In foreign news, the trade dispute between US and China escalated further last week as China has been reported to have plans to retaliate by restricting exports of rare earth minerals to the US (Reuters, 29 May), which could impact not just the tech sector, but the energy, automobile and defense industries as well. Global equities including the Hang Seng Index (HSI) futures were trading in the negative territory throughout the week, with the HSI futures finishing at 26,717.0 points last Friday. A total of RM351.5mil worth of HSI warrants were traded last week, capturing 77.7% of the total warrants market turnover. Put warrant HSI-H6S was the most active warrant last week with RM70.3mil traded, followed by call warrant HSI-C5Q with a turnover of RM59.4mil.

Top stock warrants by value traded:

Warrant nameValue
IssuerExercise priceExpiry date
TM-C417.72Macquarie3.5030 Sep 2019
AIRASIA-C834.39Macquarie2.8831 Oct 2019
DRBHCOM-C703.85CIMB1.8031 Oct 2019
MYEG-C653.43Macquarie1.5030 Sep 2019
MYEG-C683.23Macquarie1.8531 Oct 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.