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HSI-H8M still active but lower turnover as expiry looms


The Malaysia warrants market saw softer trading activity last week with RM290.4mil traded, 21.2% lower than the prior week. The decline can be attributed to a shorter trading week for the Hang Seng Index (HSI) as the Hong Kong market was shut on Monday (13 Apr) in conjunction with the Easter holiday. Yet, warrants over the HSI still dominated the warrants space with a RM160.0mil turnover, approximately 56.4% of the total warrants market.

Major equity indices closed in the positive territory last week amid market volatility from a mixture of good news and bad economic data. On Tuesday (14 Apr), the HSI futures opened 40 points higher from the previous close and continued to climb higher throughout the day after China released their trade data for the month of March with both exports and imports declining less than expected (Bloomberg, 14 Apr). On Wednesday, the index futures traded higher to touch 24,610 before erasing all the gains to finish marginally above the 24,000 level. The HSI futures declined another 0.4% on the next day to finish at 23,950 after disappointing US retail sales data. On Friday, the index futures then rebounded more than 700 points following the report that Gilead Science’s coronavirus drug trial shows encouraging early results (CNBC, 16 Apr).

HSI put warrant HSI-H8M and call warrant HSI-C9J were listed as the top 2 traded warrants for the fifth consecutive week. However, put warrant HSI-H8M saw its turnover decline 59.2% to RM41.0mil. traded last week as the put warrant will be expiring soon on 28 April 2020. In general, warrants with shorter time to expiry will experience higher time decay compared to longer dated warrants, with all other factors held constant. This means that investors will incur higher holding costs when trading warrants that are close to expiry and should look to switching to longer dated warrants. 

On the other hand, bullish investors took the opportunity to collect more than 25.0M units of HSI-C9J as the HSI futures declined on Wednesday and Thursday, resulting in this call warrant being fully sold out. However, warrant holders subsequently sold back their positions on Friday as the HSI futures touched 24,689 points, the highest level since early March, resulting in this warrant being removed from the sold out list.

Top warrants by value traded:

Warrant name Value
Issuer Exercise level Expiry date
HSI-H8M 41.0 Macquarie 23,000.0 28 Apr 2020
HSI-C9J 39.8 Macquarie 27,400.0 29 Jun 2020
HSI-C9S 36.3 Macquarie 27,600.0 28 Aug 2020
HSI-HAF 16.7 Macquarie 24,600.0 28 May 2020
FBMKLCI-H8R 12.0 Maybank 1,508.0 30 Oct 2020


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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.