SP500 actively traded, Hang Seng Index’s losing run continues
POSITIVE US data pointing towards a stronger economy is giving the Federal Reserve more evidence to support an interest rate increase in December. This, coupled with an expectation for the incoming Trump administration to increase fiscal spending, sent major US indices surging to record highs last week. The Dow Jones hit an all-time high of 18,923.06 last Tuesday while the Nasdaq closed at 5,333.973 on Thursday. The S&P 500 index was seen flirting with its record high of 2,190.15, closing 10.2 points higher at 2,187.12, last Thursday.
Demand for S&P 500 warrants climbed in the past two weeks as investors traded the US market movements in the Malaysian time-zone. Last Friday, bargain hunters were seen taking home 3.0 million units of put warrant SP500-H1 as the warrant dipped further, losing 9.1% to RM0.100 at Friday’s close.
As the SP500 warrants are denominated in ringgit, an appreciating dollar/ringgit exchange rate would result in an increase in the value of SP500 warrants, all other things being equal. Vice-versa, a weakening US dollar would result in a drop in the value of the SP500 warrants.
In the region, the Hang Seng Index continued to slide last week, extending its losing streak to four weeks, as it dropped a further 0.8% to close at 22,344.21. Warrants over the HSI were actively traded, taking three out of the top 5 most actively traded warrants spots last week.
Call warrant HSI-C54 had 108.3 million units changing hands, emerging as the most actively traded warrant for the week. Investors net bought 6.4 million units of the warrant as it lost 32.3%.
Investors were also net buyers of put warrant HSI-H57, taking home 1.4 million units out of the 70.5 million units traded.
Elsewhere, 14.3 million units of put warrant FBMKLCI-H97 were traded last week as the underlying index closed lower for the third consecutive week, losing 0.6%.
For more information on index warrants, visit https://www.malaysiawarrants.com. my/indexsw.
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.