HSI remains in the spotlight as futures extend gains

THE second week of February witnessed a total warrants turnover of RM285.3 million amid a less volatile week, which contributed to a 21.8% week-on-week drop in turnover for the overall warrants market.

Warrants over the Hang Seng Index (HSI) and the iShares China A50 Index ETF continued to take centre stage as prices extend their gains further over the week despite the coronavirus fallout in China having no end in sight.

Trading in the HSI futures started the week somewhat uninspiring as prices ended in the red on Monday, dragged down by overnight losses on Wall Street the week before as concerns weigh following the Federal Reserve’s warning that the coronavirus outbreak posed a “new risk” to the economy.

Sentiment then picked up starting Tuesday and carried on to Wednesday with prices touching a high of 27,820 points before ending at 27,770 points (+0.7%) on Wednesday.

The advance saw profit-taking among the call warrants HSI-C7K and HSI-C7Q, with investors selling on strength for a total of 12.1 million and 12.3 million units respectively in the two days combined. HSI-C7K and HSI-C7Q each saw an 81% and 47.5% surge in price within the two trading days.

The rebound in the HSI futures, however, was halted on Thursday as confidence faded amid reports of a steep climb in the number of confirmed coronavirus cases and deaths after officials in China adopted a new methodology for diagnosis. The futures eventually

ended the week at 27,753, gaining 1.7% despite the weaker sentiment towards the end of the week.

The HSI warrants still dominated the warrants market, comprising 52.6% of turnover, with call warrant HSI-C7Q stealing the limelight to be the most popular warrant for the week, recording a total turnover of RM49.2 million with 175.7 million units traded.

This was followed by put warrant HSI-H8T with a total turnover of RM38.4 million.

The call warrant over the China A50 ETF, A50CHIN-C54, also saw increased popularity last week with a total turnover of RM12.8 million as investors were keen to gain exposure to the performance of the 50 largest A-Share companies listed on the Shanghai and Shenzhen stock exchanges, amidst the coronavirus outbreak in China.

On the local front, call warrant over Ekovest Berhad, EKOVEST-C3, was among the popular favourites as it rose 50% week on week after the shares ended 10% higher for the week at 76 sen. Other than that, call warrants MYEG-C84, DSONIC-C17 and AIRASIA-C1A were also popular with investors.

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.