Trading stays robust despite holiday-shortened week

WARRANTS trading activity in the fourth week of January remained active despite one less trading day due to the Thaipusam holiday on Jan 25.

Although total warrants turnover fell slightly by 7.8% from the previous week to RM413.1 million, warrants over Malaysian shares gained investors’ interest with turnover soaring 20% week-on-week (w-o-w) to RM179.7 million, comprising taking up 36.2% of the overall warrants market.

Meanwhile, warrants over the Hang Seng Index (HSI) remained active, recording RM259.7 million, dominating the overall warrants market by 62.9%.

The HSI January futures kickstarted the week in a bearish tone, dropping 2.1% and closing just below the 15,000 level at 14,978 points on Monday due to the steady benchmark lending rates at 3.45%, removing hopes for a rate cut to stimulate the property sector.

However, the futures rebounded over 2% on Tuesday, following a Bloomberg report stating that the Chinese authorities are considering a two trillion yuan rescue package to stabilise equity markets and boost investors’ confidence.

Despite surging another 5% over the next two days, the futures erased gains on Friday, falling 1.3% to 15,975. However, the futures recorded weekly gains of 4.4%.

Call warrants, namely HSI-CVE, HSI-CTE and HSI-CVB, were among the actives, recording the highest volume traded at 218.6 million, 209.1 million and 195.5 million units, respectively.

HSI-CTE and HSI-CVB were the highest liquidity warrants with six million units placed on each of their respective bid and offer quotes, in addition to having tight spreads.

When selecting a warrant, investors should consider the warrant’s liquidity because they allow investors to enter and exit their positions with ease.

Meanwhile, on the local front, call warrant YTLPOWR-C39 saw up to 23.7 million units traded as the underlying rallied 9.1% for the week.

Other popular warrants over Malaysian stocks include UEMS-C92 and YTL-C69, recording up to 50 million and 8 million units traded, respectively. Their underlying shares, UEM Sunrise and YTL Corporation, posted strong weekly rallies of 5.9% and 11.4%, respectively.

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.