Trump’s shock win sparks trad­ing spree

The Sun (Malaysia) - - SUNBIZ -

LAST WEEK was ex­cit­ing for the struc­tured war­rants mar­ket as the Amer­i­cans elected Don­ald Trump as the 45th pres­i­dent of the United States on Tues­day.

Global mar­kets turned jit­tery and Bursa Malaysia’s FBM KLCI took a beat­ing on Wed­nes­day, shed­ding nearly 1% to close at 1,647.62. In­vestors were given a small win­dow of re­lief on Thurs­day be­fore the mar­ket tanked a fur­ther 18.60 points or 1.1% on Fri­day to end the week at 1,634.19. The lo­cal bourse lost 0.9% week on week as un­cer­tainty con­tin­ues to loom.

As the votes were be­ing counted dur­ing our mar­ket hours last Wed­nes­day, the struc­tured war­rants mar­ket was the most ac­tive de­spite most bourses be­ing in the red. Turnover on Wed­nes­day spiked to a year-to- date high with a turnover of RM154 mil­lion. Out of this, 85% came from in­dex war­rants. War­rants over the volatile Hang Seng In­dex (HSI) were in fo­cus as the Hang Seng Fu­tures tum­bled 2.3% to 22,403. In­vestors were on a buy­ing spree, ac­cu­mu­lat­ing var­i­ous HSI call war­rants, in­clud­ing HSI-C48, HSIC60 and HSI-C66 as the mar­ket plunged.

In­vestors were re­warded on Thurs­day as the HSI Fu­tures took an about-turn, re­bound­ing 2.4% to 22,932. As these call war­rants track the fu­tures con­tracts, they fol­lowed suit and re­bounded with the HSI-C60 gain­ing a hefty 20.8%. Con­versely, put in­dex war­rants will move in an in­verse di­rec­tion as the un­der­ly­ing fu­tures fall in value as fu­tures in­creases.

With var­i­ous in­dex war­rants in


the mar­ket, in­vestors are now able to gain ex­po­sure to for­eign stock in­dices which in­clude the China A50 In­dex, the Hang Seng In­dex and even the S&P500 In­dex. These ad­di­tions are on top of the ex­ist­ing war­rants over the FBM KLCI and the Malaysian coun­ters.

For the week ended Nov 11, S&P500 war­rants were more ac­tive than usual as in­vestors were trad­ing in the US mar­ket dur­ing our Malaysian time zone.

These war­rants track the S&P500 e-mini fu­tures that trade through­out the full trad­ing hours of the Bursa main board. Specif­i­cally, call war­rant SP500-C1 had 9.6 mil­lion units traded on Wed­nes­day as it fell 21.4% to

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.

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