Surge in trading activity as HK market rebounds, Farm Fresh and Ekovest soar
AS the month of April drew to a close, the Hong Kong’s Hang Seng Index (HSI), after suffering from a downturn for most of the month and hitting the month’s low of 19,869.34 points on April 25, rose for four consecutive days last week, including a 4% surge on April 29, to end the trading week and month at 21,089.39 points, 6.1% higher from its lows, though still 4.1% down month-on-month.
On the back of this volatility, last week, warrant trading activity almost doubled that of the previous week (additionally due to the Easter Monday public holiday in Hong Kong and the Nuzul Al-Quran holiday in Malaysia in the previous week). The average daily turnover for warrants surged 57.7% to RM63.1 million per day last week, largely due to the increased activity in the HSI warrants, which took up 69.5% of turnover. Other than the HSI warrants, trading activity in all other warrant types also saw an increase, more notably for warrants over the S&P 500® Index (SP500) as one of the SP500 puts i.e. SP500-HZ clocked a turnover of RM12.5 million last week, securing a spot in the top five warrants by turnover. Last week, HSI warrants took up the first four spots, with investors trading in both the call and put warrants, allowing them to potentially profit from either market direction.
Other warrants that were on investors’ radar last week include the call warrant over Meituan,
MEITUAN-C12, which saw a turnover of RM7.3 million. Meituan shares rallied 21.6% last week, while call warrant MEITUAN-C12, which has the lowest exercise price among all call warrants over Meituan, saw its bid price track its underlying to surge 64.9% week-on-week.
On the local front, call warrants over Farm Fresh, FFB-CF, and Ekovest, EKOVEST-C26, had trading volumes of 38.2 million and 25 million units, respectively. On Friday, bullish investors net bought 11.2 million units of FFB-CF after it jumped 7.1% on the back of the 1.2% gain in Farm Fresh shares. FFB-CF is a more responsive warrant as it has a sensitivity of 2-3 ticks, meaning it tends to move 1 tick (0.5 sen) for every 2-3 ticks (2-3 sen) change in Farm Fresh shares.
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.