Hang Seng Index warrants dominate as market retreats

INVESTORS moved away from local stock warrants after state-owned 1Malaysia Development Bhd (1MDB) defaulted on a US$1.75 billion (RM6.85 billion) bond last week. Activities in the warrant market increased 3.3% to RM113.9 million from the previous week’s RM110.2 million.

Hang Seng Index (HSI) warrants continued to attract trading interest. The HSI warrants contributed 46.4% of the total warrant market despite activities slowing down in the middle of the week which coincided with the US Federal Open Market Committee meeting.

Put warrant HSI-HW recorded the highest warrant turnover last week at RM31.6 million. The put warrant gained 15.5% as HSI futures lost 2.4% in the week ended April 29.

Meanwhile, HSI-C19 was the most active index call warrant for the week with a total of 52.2 million units changing hands. Its bid price fell in line with its underlying futures, losing 21.4% week-on-week.

Back home, the exhausted FBM KLCI fell through the 1,700 psychological level, losing 2.6% w-o-w. Put warrant FBM KLCIHW, with a strike price of 1,700, was popular among investors, with RM4.5 million worth traded over the week.

Another put warrant listed over the FBM KLCI was also in the focus. Put warrant FBMKLCI-H51, with a strike level of 1,680, recorded a turnover of RM2.5 million as it jumped 31.5% to end the week at RM0.355 .

With a turnover of RM6.8 million, Air-Asia-C31 was one of the most actively traded single stock warrant for the week. It lost 30.0% when the underlying share price fell 9.5% to RM1.90 on Friday’s close. Similarly, AirA-sia-C33, which is the newest warrant over the underlying enjoyed a modest week with 3.5 million units traded on Friday alone.

To view the full list of structured warrants available on Bursa Malaysia, visit malaysiawarrants.com.my.

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.