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MaybankIB issues new European style cash-settled put and call warrants

22 May 2020 / 11:19 H.

PETALING JAYA: Maybank Investment Bank Bhd (MaybankIB) has issued four new European style cash-settled put warrants and four new European style cash-settled call warrants over the shares of CIMB Group Holdings Bhd, Genting Malaysia Bhd, My EG Services Bhd and SP Setia Bhd.

The warrants will have a tenor of seven months and an issue size of 100 million warrants each.

MaybankIB explained that the put warrants allow investors with a bearish view on the underlying shares to benefit from a downward share price movement and typically increase in value when the price of the underlying share depreciates.

On the contrary, the more regularly issued call warrants allow investors with a bullish view on the underlying shares to benefit from a rising share price and increase in value when the price of the underlying share appreciates.

The issuance is in line with Maybank Research’s view that Malaysia’s economic outlook is further challenged by sharply lower commodity prices, besides the increasingly tangible earning headwinds due to Covid-19 containment measures.

Furthermore, it also pointed out that foreign investors have sold RM2.7 billion net worth of Malaysia equities in April 2020, bringing the cumulative foreign net sell to RM10.4 billion in the first four months of this year.

“In light of the uncertainties impacting the economy and equity market in the coming months, our put-call warrant pairing issuance provides investors an opportunity to express their short-term bullish or bearish views on the underlying shares,” MaybankIB said in a statement today.

This allows investors to take advantage of any decline in share prices should the economic landscape and corporate fundamentals deteriorate further and participate in a technical rebound or sustained recovery from the recent major sell-off.

Investors are able to gain exposure to the banking, gaming, technology, and property sectors of the Malaysian economy through these warrants in-line with their personal directional outlook.

MaybankIB said the call and put warrants are leveraged instruments that could potentially magnify any investment gains or losses should the directional views on the underlying shares materialise or otherwise.

The put warrants are issued and listed as CIMB-HD, GENM-HB, MYEG-HA, and SPSETIA-HB, while the call warrants are issued and listed as CIMB-C63, GENM-C79, MYEG-C98, and SPSETIA-C28. The terms and conditions of these warrants are stated in their respective term sheets dated May 21, 2020.

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