FGV war­rants in fo­cus as share price de­clines 18.8%

The Sun (Malaysia) - - SUNBIZ -

FELDA Global Ven­tures (FGV) ex­pe­ri­enced a lack­lus­tre per­for­mance last week, record­ing a to­tal loss of 18.8%. The share price of FGV plunged to RM1.55 on Wed­nes­day, its low­est within the third quar­ter of this year (3Q16). The weak share price came on the back of its fi­nan­cial re­sults for the third quar­ter, show­ing a 7.1% drop in its rev­enue to RM4.19 bil­lion. Its pre-tax profit tum­bled 93% to RM14.14 mil­lion year-onyear. FGV stated that the de­cline was largely due to lower crude palm oil pro­duc­tion, higher raw sugar costs, lower earn­ings from down­stream seg­ment and losses in­curred by a jointly con­trolled en­tity. FGV’s weak share price was ex­ac­er­bated by an­other head­line which stated that FGV con­firmed an in­ves­ti­ga­tion is on­go­ing into pos­si­ble fraud at its 50%-owned unit in Turkey.

Fol­low­ing this, three call war­rants over FGV, namely FGV-C16, FGV-C12, and FGV-C17 were in the spot­light last week. Over­all, war­rants over FGV recorded trad­ing vol­ume of 294.0 mil­lion units, rep­re­sent­ing 9.9% of the to­tal war­rants turnover, com­ing in sec­ond af­ter the Hang Seng In­dex (HSI) war­rants.

Bar­gain hunters took the op­por­tu­nity of the weak share price, go­ing on a shop­ping spree buy­ing these war­rants. For in­stance, FGV-C17 had in­vestors ac­cu­mu­lat­ing a to­tal of 11.7 mil­lion units out of 51.7 mil­lion units traded through­out the week. The bid price of FGV-C17 tum­bled 50.0% to close at RM0.045 week on week.

Last week, Bank Ne­gara Malaysia de­cided to keep the Overnight Pol­icy Rate (OPR) un­changed at 3.0% at its Mon­e­tary Pol­icy Com­mit­tee (MPC) meet­ing onWed­nes­day. The out­come was al­ready an­tic­i­pated by many, and Bank Ne­gara said it is con­sis­tent to en­sure that the do­mes­tic econ­omy con­tin­ues on a steady growth path amid sta­ble in­fla­tion, sup­ported by con­tin­ued healthy fi­nan­cial in­ter­me­di­a­tion in the econ­omy.

The lo­cal bourse’s FBM KLCI inched up 0.2% week on week, clos­ing at 1,627.26 points on Fri­day. Month to date, the FBM KLCI is down 2.7%.

Look­ing at for­eign in­dices, the Hang Seng fu­tures were on an up­ward mo­men­tum, climb­ing 399 points or 1.8% week on week. The HSI fu­tures closed in pos­i­tive ter­ri­tory, fin­ish­ing at 22,730 points last Fri­day. Bullish in­vestors were seen heav­ily trad­ing the HSI calls, no­tably HSI-C48, a call war­rant over HSI. This war­rant, which will be ex­pir­ing at the end of next month, was the most pop­u­lar war­rant as in­vestors traded 117.4 mil­lion units. The war­rant’s bid price rose 30.2% week on week as it ended at RM0.345 on Fri­day.

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.

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