Volatile Sapura Energy stages rebound

THE share price of Sapura Energy continued its rollercoaster trend, touching an all-time low of 41 sen during the week before rebounding to close at 48 sen on Friday. Month to date, the stock is down 25.6% as the market continues to be uncertain with the oil and gas giant. Call warrants over Sapura Energy were active as investors bargainhunted in anticipation of a correction in the share price.

Among the many warrants over Sapura Energy, SAPNRG-C58 was the most active with RM5.2 million traded. The warrant price fell to a low of 1.5 sen on Wednesday, before rebounding a whopping 66.7% on Thursday, ultimately rewarding the bargain hunters who bought the call warrants earlier.

With such volatile price movements, investors should exercise caution; most warrants over Sapura Energy are far outof-the-money as the exercise price of these warrants is much higher than the underlying share price. Due to the low prices of these warrants, their gearing levels are often much higher, translating to bigger movements in the warrant price, thus providing higher profit potential but also a higher level of risk.

Warrants over Hengyuan Refining were also active as the share price closed 8.1% lower week on week. Hengyuan-CH emerged the top warrant with RM14.2 million traded. The warrant price fell 15.2% to close at 28 sen on the week.

In foreign warrants, those over the volatile Hang Seng Index (HSI) futures represented 43% of the week’s turnover. HSI futures started the week strongly, gaining 1.9% or 598 points to close at 31,594 on Monday before pulling back slightly to end the week at 31,450, up 1.5%.

Both HSI call and put warrants were actively traded, but put warrant HSIH4A came up top for the week with RM30.2 million traded. Trading activity largely took place on Monday as the put warrant fell 16.2% to 44 sen, moving in an

Warrant name

HSI-H4A HSI-C1X HENGYUAN-CH HSI-C3C TOPGLOV-C29

Value (RM mil)

29.2 24.6 13.9 13.3

7.5

Issuer inverse direction from the underlying. Put warrants will gain in value as the underlying declines, allowing investors to benefit from any pullbacks in the underlying.

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.

Exercise price (RM) Exercise level

29,600 32,000

8.00 34,000

9.20

Expiry date

*Price change calculated using bid price Source: Bloomberg, malaysiawarrants.com.my