Hang Seng Index warrants back in focus

LAST week, the Hang Seng Index (HSI) started the week strongly, rallying a total of 655 points (2.8%) for four consecutive days, before falling 0.4% on Friday to 23,851.82 points. In response to the market strength, warrants over the HSI garnered big demand among investors throughout the week, contributing about 50% of the total warrants turnover, recording RM173.9 million.

HSI-C36 was the most active warrant as bullish investors actively traded 88.2 million units. Investors took profits, selling back 9.3 million units of HSI-C36 whose bid price gained an impressive 24.5% to close at RM0.585 on Friday. Investors should note that HSI-C36 will expire on Oct 28, and thus its last trading day will be on Oct 25.

The put warrant, HSI-H63, also attracted demand among investors who were betting on a market reversal, buying 6.5 million units. The put warrants move in an opposite direction to their underlying, falling in value as the HSI futures increase. As a result, the HSI-H63 fell 24.3% over the week to RM0.405.

Back home, warrant SKPETRO-C30 over the oil and gas (O&G) counter, was in the spotlight last week, recording a total trading volume of 39.1 million. SKPETRO-C30 whose bid price tracked its underlying share price closely jumped 11.1% to RM0.100 as SapuraKencana gained a total 5.1% for the week.

SapuraKencana experienced strong upward momentum in its share price after the O&G services provider was recently awarded three contracts with a combined value of about US$215 million (RM893.2 million).

SapuraKencana was quoted in SunBiz on Oct 3 as saying that they expect these jobs, and the potential contract extensions, will contribute positively towards their earnings

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.