KUALA LUMPUR: Macquarie Capital Securities (Malaysia) Bhd has issued a total of 1,000 structured warrants in Malaysia since its debut in October 2014, with the latest being the issuance of 12 new warrants on Thursday.
The global financial services provider said on Thursday that over the past three years, Macquarie has been the leading warrant issuer in Malaysia, driving education, new technology and keeping investors informed via the structured warrants website malaysiawarrants.com.my.
Macquarie is committed to providing the highest quality market making. Year to date, Macquarie has commanded the leading market share, with 60.1% of the Malaysian warrant market turnover.
It said following the stamp duty exemption for structured warrants in 2018, investors can now trade warrants without paying any stamp duty, making warrants more attractive to traders and investors alike.
Recall that the exemption was provided by the government as an incentive to boost trading, liquidity and vibrancy in the local market.
“This appears to have been successful, with warrant volumes increasing 163% (compared to the same period last year) since the exemption was introduced,” it said.
Macquarie said there has been greater volatility in the Malaysian and global equity markets due to rising global geopolitical tensions, trade tensions between China and the US, and Malaysia’s General Election (GE) all adding to investor uncertainty.
“These dynamics contributed to the strong growth of the structured warrants market from end 2017, with structured warrants turnover increasing to an average of RM97.5mil per day for the first five months of 2018 (5M2018), compared to an average of RM25mil per day in 2017.
“The daily turnover hit a high of RM613.1mil on April 6, 2018, which represented a whopping 40.2% of the total turnover on the whole of the Bursa for that day,” it said.
With the local market becoming increasingly uncertain, warrants over Malaysian single stocks took up a smaller piece of the warrants market, constituting 52.3% of 5M2018 warrants turnover, compared to 79.2% in 2017.
Warrants over Sapura Energy
, Supermax, Hengyuan Refining and My E.G. Services were actively traded during this period due to renewed volatility, especially around the GE period.
Index warrants were actively traded from March 2018 onwards, particularly the call and put warrants over the Hang Seng Index (HSI), which made up 43.9% of the warrants turnover from January to May.
So far, Macquarie is the only structured warrants issuer to list structured warrants over the HSI on the Bursa. These warrants allow investors to gain a leveraged exposure to the HSI while trading on the local exchange.
Barnaby Matthews, head of equity derivatives products for Macquarie in Asia said: “Our primary focus remains on education and delivery of information on warrants. Last year we held more than 25 free seminars for local investors.
“We believe that as investors become more knowledgeable in their investing, the market will continue to grow,” he added.
“The recent rise in trading activity reflects further growth potential in the Malaysian warrant market. As volatility in the market increases, we expect the shift to index warrants to continue, particularly for investors looking to profit from any short term falls in prices, as put warrants are one of the few ways that Malaysian investors can profit from falls in the stock market,” added Matthews.
Bursa Malaysia Bhd CEO Datuk Seri Tajuddin Atan congratulated Macquarie on the issuance of its 1,000th structured warrant for listing on Bursa Malaysia.
He said the Malaysian warrant market continues to show promising growth, with increased investor appetite towards more sophisticated products.
“Education also remains a key component in the success of this investment tool, and I am pleased to acknowledge Macquarie’s exemplary commitment towards investor education and efforts to further widen the product range available to investors,” said Tajuddin.
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