21 June 2017
Warrant Activity: China A-shares to join MSCI Emerging Markets Index
  • Earlier this morning, index provider MSCI announced that China A-Shares will be included in its Emerging Markets Index. While the pro forma representation would just be 0.7% of this index, it represents a landmark step in China’s integration with the global financial system.
  • The five most active index warrants for June month to date were Hang Seng Index warrants. They comprised three Call and two Put Warrants, with a total turnover of S$594 million. Hang Seng Index Put Warrant (CHPW) with an expiry date of 28 July 2017 and strike level of 25,200 was the most active index warrant.
  • 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 Call Warrant (CGQW) with a strike level of S$22.00 and expiry date on 16 October 2017 was the most active warrant.

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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.

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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.

 

Name

Stock Code

Call/Put

Expiry Date

Strike Level

MTD Traded Value (S$)

HSI 25200 MB EPW170728

CHPW

P

28-Jul-17

25,200

168,974,203

HSI 25800 MB ECW170728

CGYW

C

28-Jul-17

25,800

157,356,043

HSI 26400 MB ECW170830

CHLW

C

30-Aug-17

26,400

106,062,800

HSI 24400 MB EPW170728

CGSW

P

28-Jul-17

24,400

81,382,499

HSI 26600 MB ECW170728

CHQW

C

28-Jul-17

26,600

80,968,263

Source: SGX (data as of 20 June 2017)

 

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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.

 

Name

Stock Code

Call/Put

Expiry Date

Strike Level

MTD Traded Value (S$)

DBS MB ECW171016

CGQW

C

16-Oct-17

22.00

2,583,330

DBS MB EPW171016

CGXW

P

16-Oct-17

19.50

2,047,714

UOB MB ECW171016

CGVW

C

16-Oct-17

24.50

1,783,123

OCBC BK MB ECW171113

CGMW

C

13-Nov-17

10.20

1,068,886

UOB MB EPW171016

CGUW

P

16-Oct-17

21.50

969,156

Source: SGX (data as of 20 June 2017)

 

http://www.sgx.com/wps/wcm/connect/5adc91d5-49be-4a34-b4c8-421205b687e7/1/SGX%2BSW%2BWeb%2BBanner_300x250.jpg?MOD=AJPERES&CACHEID=5adc91d5-49be-4a34-b4c8-421205b687e7/1Specified 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.

 

 

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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.

 

Using Warrants in Your Portfolio

Trading Warrants on SGX

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