- Structured Warrants and Daily Leverage Certificates (DLCs) generated a total turnover of S$2.3 billion in the month of July (averaging S$106 million per session), the highest since 2009. Structured Warrants contributed majority of the volumes with S$2.2B traded.
- DBS Warrants and Xiaomi Warrants were the most active stock Warrants MTD with a turnover of S$3.5 million and S$2.1 million respectively. Last Thursday, DBS reported a Q2 net profit gain of 20% YoY gain while Xiaomi announced that its IPO stabilisation period ended on 28 July 2018.
- Two new 7x Long HSI and HSCEI DLCs listed for trading on SGX on 25 July 2018 at a starting price of $2.50. The new DLCs will provide investors with higher price sensitivity to the underlying index movement versus the existing DLCs.
Leveraged Products July Turnover of S$2.3B Highest Since 2009
Leveraged products (Structured Warrants and DLCs) generated a total turnover of S$2.3 billion in the month of July, averaging S$106 million per trading session. This was the highest monthly turnover since 2009. Structured Warrants contributed majority of the volumes with S$2.2 billion traded, mostly driven by activity in the Hang Seng Index Warrants.
There were 24 new warrant listings in July and a total of 109 warrants listed on SGX as at 31 July 2018. Click here to view a list of the newly listed warrants.
Most Active Stock Warrants MTD – DBS and Xiaomi Warrants
The most active stock warrants in August month-to-date (MTD) were DBS Warrants with S$3.5 million traded and Xiaomi Warrants with S$2.1 million traded.
DBS maintained its positive momentum for the financial year after profit rose 20% YoY to $1.37 billion in Q2 on the back of healthy consumer and non-trade corporate lending, according to a media statement. Most of the turnover on the DBS Warrants were in Call Warrants FVIW and DXCW with strike prices $29.2 and $27.8 respectively. For more details on the banks’ latest earnings reports, click here.
Macquarie listed three Xiaomi Call warrants and the first Xiaomi Put Warrant in the month of July. The four Xiaomi warrants have traded a total of S$2.1 million in August MTD. Xiaomi’s stabilisation period in connection with the Global Offering ended on 28 July 2018 and the joint representatives have fully exercised the over-allotment option. Multiple brokers have since initiated coverage on Xiaomi with target prices ranging from HKD 18.6 to HKD 23.2.
Tabled below are the details of the DBS and Xiaomi Warrants.
| DBS Warrants | Stock Code | Call/ Put | Expiry Date | Exercise Price | MTD Turnover (S$) |
| DBS MB ECW181210 | FVIW | C | 10-Dec-18 | 29.2 | 1,803,872 |
| DBS MB ECW190118 | DXCW | C | 18-Jan-19 | 27.8 | 1,114,902 |
| DBS MB EPW190118 | TRWW | P | 18-Jan-19 | 23.5 | 221,979 |
| DBS MB EPW181210 | V6UW | P | 10-Dec-18 | 25 | 170,662 |
| DBS MB EPW181001 | CSVW | P | 1-Oct-18 | 26.353 | 144,213 |
| DBS MB ECW181126 | CTVW | C | 26-Nov-18 | 31 | 35,364 |
| DBS MB EPW181126 | CTWW | P | 26-Nov-18 | 27.5 | 6,000 |
| DBS MB ECW180808 | CQXW | C | 8-Aug-18 | 30.484 | 335 |
Source: SGX
| Xiaomi Warrants | Stock Code | Call/ Put | Expiry Date | Exercise Price (HKD) | MTD Turnover (S$) | Term Sheets |
| XIAOMI20 MB ECW190204 | MPAW | Call | 4-Feb-19 | 20 | 54,094 | Link |
| XIAOMI24 MB ECW190204 | DVQW | Call | 4-Feb-19 | 24 | 1,125,895 | Link |
| XIAOMI30 MB ECW190204 | FKUW | Call | 4-Feb-19 | 30 | 10,730 | Link |
| XIAOMI17 MB EPW190204 | PGXW | Put | 4-Feb-19 | 17 | 905,489 | Link |
Live prices of the Xiaomi Warrants can be found on both SGX website and Macquarie’s warrant website. Live prices of the underlying Xiaomi share can also be found on Macquarie’s warrant website.
Two New 7x Long HSI and HSCEI DLCs
Two new 7x Long Hang Seng Index (HSI) and Hang Seng China Enterprises Index (HSCEI) DLCs started trading on SGX on 25 July 2018 at a starting price of $2.50.
| Counter Name | Stock Code | Type | Leverage | Underlying Index | Expiry Date |
| DLC SG7xLongHSI210723 | JYIW | Long | 7x | HSI | 23-Jul-2021 |
| DLC SG7xLongHSC210723 | 9HSW | Long | 7x | HSCEI | 23-Jul-2021 |
Investors should note that there are EXISTING DLCs on the SGX that are comprised of the same underlying index, type and leverage:
| Counter Name | Stock Code | Type | Leverage | Underlying Index | Expiry Date |
| DLC SG7xLongHSI210114 | CPRW | Long | 7x | HSI | 14-Jan-2021 |
| DLC SG7xLongHSC210114 | CPTW | Long | 7x | HSCEI | 14-Jan-2021 |
Based on the explanation provided by the issuer, Societe Generale (click here to read the full FAQ), the reason for the launch of the new products with the same underlying index, type and leverage is because the price sensitivity on the existing DLCs – CPRW and CPTW – are now lower due to their low per unit price. The two new DLCs will provide intra-day traders with higher-sensitivity options.
Despite the difference in price sensitivity and expiry date, investors should note that both the existing and new products will move in line with the underlying index multiplied by the leverage factor i.e. a 1% gain in the underlying index will generate a 7% gain in the 7x Long DLCs and a 1% loss in the underlying index will generate a 7% loss in the 7x Long DLCs, before costs and fees are factored in. In addition, Societe Generale will continue to provide the same market making quality for all existing and new DLCs in terms of spreads and volume.
Specified Investment Products
Structured warrants and Daily Leverage Certificates are examples 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. Speak to your broker to find out how you can qualify to trade SIPs.
