Stellar start to the New Year

THE structured warrants market started 2018 with a flourish, trading almost three times the average daily turnover in December 2017. Despite a shorter week, the total turnover of structured warrants for the four days came in at RM488.4 million, averaging at RM122 million a day.

The share price of DRB-Hicom made waves during the week as it ended the first trading day of the year with a 23.5% increase to RM2.26. It continued its climb for three more days before ending 0.4% lower at RM2.38 on Friday, gaining 30% for the week.

Warrants over DRB-Hicom constituted about 32% of total warrants traded for the week, with DRBHCOM-C37 coming in top with more than 280 million traded. DRBHCOM-C45 emerged as the most liquid warrant over DRB-Hicom with the largest bid and offer volumes, allowing investors to enter and exit their positions with certainty.

Poor liquidity in a warrant may result in investors being unable to enter or exit their positions at their intended time and price due to small bid and offer volumes.

Another active underlying last week was Hengyuan Refining Co, which surged 10.2% to RM17.96 on the first trading day of the year. The share price parted with some of its gains as it fell 3.1% and 2.5% in the next two

TOP 5 WARRANTS BY VOLUME

DRBHCOM-C37 MBSB-C5 MYEG-C24 FGV-C40 DRBHCOM-C41

days respectively, before ending the week at RM17.14, 5.2% higher week on week. With the recent run-up in Hengyuan’s share price, most of the existing call warrants are deep inthe-money, with HengYuan-CM having the highest exercise price of RM12.30.

Aside from the robust start to the warrants market, other positive news for 2018 is the exemption of stamp duty for structured warrants effective Jan 1, 2018. This was declared by the prime minister/finance minister during the Budget 2018 announcement last October and will be in effect for the next three years.

The existing rate of stamp duty is 0.1% of the transaction value, capped at RM200 per transaction. With this exemption, investors will be able to save up to RM400 for each buy-and-sell trade when trading structured

warrants.

If you have any questions about the stamp duty exemption or need further assistance, do not hesitate to contact us via our hotline at 03-2059 8840 or email us at info malaysiawarrants.com.my.

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.