|21 June 2017|
|Warrant Activity: China A-shares to join MSCI Emerging Markets Index|
China A-shares to join MSCI Benchmark Indices
Earlier this morning, index provider MSCI announced that China A-Shares will be included in its Emerging Markets Index after three previous failed attempts. According to its press release, MSCI said its decision had broad support from international institutional investors with whom MSCI consulted primarily due to improved access to China A-shares via the two Stock Connect programs that links Hong Kong with Shanghai and Shenzhen. The press release can be found here.
MSCI will include 222 China A Large Cap shares in the MSCI Emerging Markets Index (representing approximately 0.73% of the weight of the index) using a two-step inclusion process beginning in June 2018. This means that the total number of constituents in the pro forma MSCI China Index would increase from 152 to 423 - further details can be found here.
Investors who would like to gain exposure to the Hong Kong market, a market that is closely related to China, can consider the Hang Seng Index warrants listed on SGX. The five most active Hang Seng Index warrants are listed in the section below. Alternatively, investors can see the full list of Hang Seng Index warrants using the Structured Warrant Tool available here.
Five Most Active Index Warrants in June MTD
The five most active Index Warrants for June month to date were Structured Warrants of the Hang Seng Index. They comprised three Call and two Put Warrants, with a total turnover of S$594 million. The Hang Seng Index Put Warrant with an expiry date of 28 July 2017 and strike level of 25,200 was the most active index warrant in June month to date. It generated a trade value of S$168.9 million for the period.
Yesterday, this strike level was positioned 2.79% below the Hang Seng Index, which last closed at 25,924.55. The details of the five most active Index Warrants in June month to date are tabled below.
Source: SGX (data as of 20 June 2017)
Five Most Active Stock Warrants in June MTD
The five most active Stock Warrants for June month to date were three Call and two Put Warrants on Singapore’s banking stocks, with a total turnover of more than S$8 million.
DBS’s Call Warrant with a strike level of S$22.00 and expiry date on 16 October 2017 was the most active warrant. It generated a trade value of about S$2.5 million in the period.
Yesterday, this strike price was positioned 7.6% above DBS, which closed at S$20.45. The other two banks, UOB and OCBC, closed at S$23.05 and S$10.64 respectively.
The details of the five most active Stock Warrants in June’s month to date are listed in the table below.
Source: SGX (data as of 20 June 2017)
Specified Investment Products
Structured warrants are an example of Specified Investment Products (SIPs). The MAS has introduced measures for intermediaries to safeguard the interests of individual investors investing in SIPs, which are products with features that might be more complex in nature. Investors now have the opportunity to assess their qualifications to trade SIP or enhance their product knowledge through the SGX online portal available here.
Structured Warrants Education Portal
Structured Warrants have a growing presence in Asia as an alternative for investors to participate in the performance of an underlying asset at a fraction of its price, in both bullish and bearish markets. Click here for educational videos covering the basics of trading structured warrants.
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