Trading of warrants on Singapore Exchange (SGX) reached an all-time high in August, climbing just above the SGD800m (US$587m) mark, up from SGD732m in July, according to data from the exchange.
Call warrants accounted for 82.7% of overall trade, with only the Nikkei 225 attracting a majority of bearish bets at 57.9%.
Amongst providers, Vontobel closed the month of August with a market share of 22.1%, up from just 0.5% in July. Macquarie was down to 43.4%, from 54.3%, and UBS was little changed at 34.5%.
Contracts on the Hang Seng Index (HSI) remained the most popular traded warrant last month, accounting for 88.7% of the overall trade. The Hang Seng China Enterprise Index (HSCEI) and the three Singapore banking stocks, DBS, UOB and OCBC accounted the majority of ex-HSI turnover.
In the September month-to-date, cumulative trade is quite comparable with the start of the strong month of August, according to Luuk Strijers (pictured), head of products at the equities and fixed income division of the SGX.
Source: SGX, data as of September 14
"We have seen more interest in puts in September versus the previous month (albeit a slight increase of only four percentage points [to 21% of the total])," Strijers said, adding that this is hardly an indication of investor moods swinging. "This also corresponds with SGX listed structured warrants historic data," said Strijers.
Besides the slight increase in bearish bets, September has so far seen a slight dip in the popularity of HSI to 85.8%, while issuers broadly maintained their August market share levels, with UBS, at 37.3%, slightly gaining at the expense of Vontobel, which stood at 19.7% at the end of August.
Meanwhile, on the Hong Kong Exchange, the biggest derivatives venue in the Asia-Pacific region, turnover in warrants in August dropped 4.4% month-on-month to HK$210,188m (US$27,092m), while trading in callable bull-bear contracts (CBBCs) climbed 5.8% from July to HK$121,016m. The HSI, a traditionally dominant underlying in the market, was used as the reference asset in 25.1% of the warrants trading turnover, up from 23.9% in July, and about 95% of CBBC turnover, same as in July.
Warrants and CBBCs are the preferred securities trading tools for Hong Kong investors, and between them account for 21.9% of the total securities trading as of the end of August, behind equities at 69.9% and ahead of unit trusts (including ETFs) at 8.0%.
On the far smaller Australian Exchange (ASX) warrants market, average daily turnover in August slipped about 3.5% to AUD6.8m (US$5.1m), for a total of AUD157.2m across 23 trading days. The most popular underlying was the S&P/ASX 200, followed by the Commonwealth Bank of Australia, while Citi warrants maintained a dominant position, accounting for 78% of the monthly turnover.
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