Dagang NeXchange in focus as underlying rises 10.3% for the week

LAST week’s warrant trading activity rose 1.2% to RM131.2 million, with warrants over shares making up 61.3% of total turnover. Index warrants took a step back, with warrants over the Hang Seng Index (HSI) contributing 36% of turnover, and the remainder largely taken up by warrants over the local benchmark FBM KLCI and the S&P 500 Index.

On the local front, warrants over Dagang NeXchange (DNeX) were popular with investors last week as its share price had a stellar performance, rising 10.3% week-onweek (w-o-w) after ending at 75 sen, resulting in increased focus on DNeX warrants, namely DNEX-CG and DNEX-CF. DNEX-CG came in third on the top traded list with 60.7 million units traded for the week.

Other than that, there was increased activity in warrants over glove makers Supermax and Top Glove as the nation continues to battle the Covid-19 pandemic, reporting a record high of 13,215 new Covid cases on Thursday last week. Top Glove shares gained 3.9% w-o-w to RM3.97, with call warrant TOPGLOV-C1R coming in fifth on the most traded list. TOPGLOV-C1R has a lower exercise price of RM3.88 and is currently the only in-the-money Top Glove call warrant listed on Bursa. These underlyings outperformed the FBM KLCI, which rose a slight 0.1% w-o-w at 1,522.48 points.

As for the HSI, it managed to rise to above the 28,000-level last week after being beaten down in the previous week, ending at 28,004.68 points, 2.4% higher w-o-w with four of five trading days in the green. Put warrant HSI-HGR was the most active warrant for the week with 97.3 million units traded, while call warrants HSI-CFW and HSI-CFQ took second and fourth spot with 60.7 million and 44.2 million units traded, respectively.

Investors should note that HSIHGR and HSI-CFQ will expire on July 29, 2021, with their last trading date on July 27, 2021, meaning investors would not be able to buy or sell the warrants after this date.

Further, the call warrants over Geely Automobile Holdings (175 HK; a constituent of the HSI) GEELY-C4 and GEELY-C5 saw more than 7 million units traded each as Geely shares rose 3% for the week to end the week at HK$24.35.

To view the full list of structured warrants available on Bursa Malaysia, visit malaysiawarrants.com.my.

Provided for Malaysian residents’ information only. This commentary has not been reviewed by the Securities Commission Malaysia. 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. The warrants will not be offered to any US persons.