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FBM KLCI warrants gain traction amid Budget 2020

Warrants Commentary (7 October to 11 October)

Last week kicked off with a headline from the US stating that they are banning 28 Chinese public securities bureaus and companies over their alleged role in facilitating human rights abuses in the Xinjiang region, China. In addition to this, the US put visa restrictions on Chinese officials, adding to tensions between the US and China ahead of their trade talks that were scheduled later in the week (CNBC, 8 Oct).  

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HSI declined further as protests intensified

Warrants Commentary (30 September to 4 October)

It was a rocky week for the Hong Kong Hang Seng Index (HSI) last week, with the index rising 0.5% to 26,092.3 points on Monday. The Hong Kong market was shut on Tuesday in conjunction with the National Day holiday; tensions ran high as the protests in Hong Kong continued. Monday’s rise did not sustain through the week, as the HSI fell 0.2% upon reopening on Wednesday; protests escalated further when an 18-year-old protester was injured with a shot to the chest as he swung a metal rod at a riot policeman (South China Morning Post, 2 Oct).

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Bargain hunting in HSI calls continued in bearish market

Warrants Commentary (17 to 20 September)

The overall warrants turnover for last week was RM342.3mil., a slight decrease of 1.4% from the week prior. The Hang Seng Index (HSI) warrants remained the biggest contributor, making up 80.6% of turnover. Last week, one of the top news was the benchmark interest rate cut, which saw the US Federal Reserve (the Fed) lower the interest rate by 0.25% to a range of 1.75% to 2% last Wednesday during its September meeting. This was the second rate cut since July this year, amid global growth concerns and muted inflation pressures. A top Fed official signalled Friday that further interest rate cuts could come before year-end (The New York Times, 20 Sept).

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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).

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Episodic week for HSI warrants

Warrants Commentary (2 to 6 September)

Last week saw a lower turnover in the Malaysian warrants market compared to the previous week, partly due to the shorter trading week. Total warrants turnover came up to RM388.7mil. for the week or RM97.2mil. on average per day, lower than the average of RM111.7mil. in the previous week. However, warrants turnover on Tuesday and Wednesday skyrocketed in view of the increased volatility in the Hang Seng Index (HSI); turnover for warrants over the HSI was RM326.1mil., comprising 83.9% of overall turnover.

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Call warrant HSI-C7F stole the limelight

Warrants Commentary (26 August to 30 August)

The Malaysian warrants market recorded a total turnover of RM558.4mil. last week, 33.0% higher compared to a week ago. This can be attributed to the eventful week, with the escalation of the U.S.-China trade war, the G7 leaders’ summit, and the continuing Hong Kong protests. Warrants over the Hang Seng Index (HSI) continued to dominate the warrants space with a turnover of RM418.5mil., making up 74.9% of total warrants turnover last week. Continue reading Call warrant HSI-C7F stole the limelight

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Trading in HSI warrants lower despite HSI’s 1.7% recovery

Warrants Commentary (19 August to 23 August)

Last week, the Hang Seng Index (HSI) showed a recovery, trading above the 26,000 level for the whole week, which was supported by Beijing’s plan to reform its interest rate system and lower borrowing costs (Bloomberg, 19 August). On Tuesday (20 August), China made its first move to implement a long-awaited change to its interest rate policy by lowering its lending reference rate to 4.25%  through a new market-oriented pricing mechanism. This move would result in cheaper borrowing costs for companies, providing a modest easing of monetary conditions in China’s economy amid the trade war with the United States.

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Put warrant HSI-H6Q recorded 53.0% gain for the week

Warrants Commentary (5 August to 9 August)

The Malaysian warrants market was heated up last week with a total RM594.8mil. traded, the highest weekly turnover since May 2019. The increased trading activity can be attributed to rising volatility in the global equity markets which includes the Hang Seng Index (HSI). Warrants over the HSI continued to dominate the warrants space with RM463.9mil. in weekly turnover, making up a staggering 78.0% of the total warrants market.

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Warrants trading activity higher last week

Warrants Commentary (22 July to 26 July)

Trading activity in structured warrants increased last week as the overall warrants turnover surged 19.6% to RM478.4mil. Warrants over the Hang Seng Index (HSI) remained one of the biggest contributors to the Malaysian warrants space, contributing 68% of the warrants turnover while single stock warrants contributed approximately 29.2%. 

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