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Call warrant HSI-C7F rose 30% w-o-w

Warrants Commentary (10 to 13 September)

The Malaysian warrants market was sloppy last week, only clocking in a turnover of RM347.3mil., 10.7% lower compared to the prior week. Fears over the escalating trade war dampened last week as U.S. President Donald Trump decided to delay the tariffs hike on USD250bil. worth of Chinese goods as a “gesture of good will” ahead of the trade talks in October (South China Morning Post, 12 Sep). The Hang Seng Index (HSI) futures sustained the strong momentum from the prior week to record 2 consecutive weeks of gains. The HSI futures traded below the 27,000 mark last Tuesday but then saw huge buying throughout the day on Wednesday to finish at 27,109 points. On the same day, the Hong Kong Stock Exchange announced that they are going to make a USD36.6bil. bid for the London Stock Exchange (South China Morning Post, 11 Sep). The HSI futures were flirting around the 27,000 level on Thursday before breaking out to close at 27,309 points on Friday, advancing 2.7% week-on-week (w-o-w).

A less volatile week also contributed to a 19.7% w-o-w plunge in terms of turnover for the HSI warrants to RM261.8mil. last week. It was a pleasant week for the HSI call warrants holders, especially call warrant HSI-C7F, which saw a 30.0% gain for the week. The call warrant topped the top traded warrants list with RM44.4mil. traded. Investors were net sellers for this call warrant as they sold back a total of 2.9mil. units last week. Meanwhile, investors also traded RM41.9mil. worth of put warrant HSI-H8E, which placed this warrant second on the list. Bearish investors saw the surge in the HSI futures as a buying opportunity for this warrant as it declined 27.3% w-o-w.

On the local front, warrants over Axiata Group were the most popular last week as merger talks between Axiata Group and Telenor Asia (DiGi.com’s major shareholder) were called off due to the complexities involved, according to a filing to Bursa Malaysia. Axiata Group’s share price dipped 15.8% last Tuesday following the news, but found some ground and rebounded a total 3.9% from Wednesday to Friday. Investors who were looking for a rebound in Axiata Group’s shares took home 2.5mil. units of call warrant AXIATA-C39, which has an exercise price of RM4.88.

Top warrants by value traded:

Warrant nameValue
(RM’mil.)
IssuerExercise levelExpiry date
HSI-C7F44.4Macquarie27,40030 Dec 2019
HSI-H8E41.9Macquarie24,60030 Dec 2019
HSI-C7E41.8Macquarie29,20030 Dec 2019
HSI-H8B37.6Macquarie25,60028 Nov 2019
HSI-H6S20.3Macquarie25,20030 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.