PETALING JAYA: Affin Hwang Investment Bank Bhd (Ahib) will focus on the aviation and tourism sectors in its structured warrant issuances this year in line with the theme of China reopening.
AHIB equity derivatives associate director Lim Chin Anh said the investment bank is looking at around 96 structured warrant issuances this year, with an average of eight issuances on a monthly basis.
“We will analyse the trend in the market, but for now, we see sectors like aviation and tourism picking up as China relaxes some of its public policies,” he said at a press conference in conjunction with the Ahib Inaugural Structured Warrants listing ceremony here today.
A structured warrant is a leveraged financial instrument that derives its value from the value of an underlying security, and can provide exposure to the underlying security for a fraction of its price.
Lim elaborated that Ahib would be looking at global economic developments as well as interest rates, which affect banks and the financial sectors as there is demand from investors.
“We foresee markets picking up very fast and we noticed interest in certain counters. Hence, it’s easy for us to just scale up and ramp up our issuance, but so far, eight issuances on a monthly basis is just average. We hope it could be higher,” he said.
The issuance of Ahib’s first four series of structured warrants is aimed at catering to the needs of the increasingly diverse and sophisticated investors locally.
Ahib today listed three call warrants and one put warrant consisting of Dagang Nexchange Bhd (call warrant), Hengyuan Refining Co Bhd (call warrant), and MyEG Services Bhd (call warrant/put warrant).
Meanwhile, Bursa Malaysia Bhd CEO Muhamad Umar Swift in his opening remarks said more than 24,000 retail investors traded structured warrants last year, with a total trade value of RM13.83 billion.
“There were 1,447 new structured warrant listings in 2022, close to an all-time high of 1,452 listings in 2021,” he said.
The local bourse had previously amended certain provisions relating to structured warrants in the Main Market Listing Requirements (with effect from Jan 19, 2023).
The key amendments to the provisions on structured warrants include revising the market capitalisation requirements for structured warrants for underlying shares, revising the average daily market capitalisation for the three months preceding the date of issue to RM500 million from RM1 billion previously.