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Malaysia Warrants News

Beware of DRBHCOM-CC Further Issuance

CIMB has announced today that it plans to further issue another 50 million DRBHCOM-CC on top of its existing issue of 50 million.  When issuers carry out additional issues, it usually means that the amount outstanding not held by the public has reached a low enough level for the issuer to want to increase supply.  The reason why issuer wants to issue more warrants is to ensure effective market making.  It is argued that when too many outstanding issues are in the hand of the public, the warrant may not track the underlying movement effectively, hence the need for additional issue.  Nevertheless, this argument is only valid if the issuer is market making in a fair way. 

Why is UNISEM-CA volume so High!

Unisem share had a strong day last Friday climbing up 8 sen or almost 4% to close at RM2.13.  This has led to a spectacular rally in UNISEM-CA, which surged 85% or 3 sen to 6.5 sen on volume of more than 33 million warrants.  The company warrant UNISEM-WA was also up on respectable volume of 6.2 million while UNISEM-CB attracted only a relatively modest volume of 3 million.

Why is the volume of UNISEM-CA so high considering its total warrants issued was only 100 million?

Brand New Play

The new 10 year warrant of PJ Development Berhad was listed yesterday.  This is a brand new play following the expiry of PJDEV-WB which had a volatile run.

The following are the new warrant indicators:

Getting a Glimpse of Issuers’ Market-Making Activities

When buying structured warrants, one must make sure that he is not buying the warrants at very high valuation so that the instruments track the underlying movement effectively.  One way to better equipped in trading structured warrants is to look at issuers’ market making activities.  Unlike warrant traders in Hong Kong, we are not as fortunate to be able to lay our hands on issuers’ market making activities on a daily basis.  Bursa Malaysia only requires issuers to publish their market making activities at the end of the month.

 

Jotech-WA : Commodity and Volatility Come together

When a manufacturing based company ventures into the commodity space, the stock price will undoubtedly becomes very volatile.  One such company experienced a 100% increase in share price from 7 sen to 14 sen in the last two month saw its price sunk by more than half of its gain to 9.5 sen within days as the Korean conflict affected market sentiment.  Its warrant also dropped 40% from 5 sen to 3 sen in the process as investors dumped the instrument.  Nevertheless, Jotech Holdings Berhad share price may recover just as fast if sentiment recovers as its fundamental had improved significantly.

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