KUALA LUMPUR: Macquarie Capital Securities (Malaysia) Sdn Bhd is expected to issue between eight and 10 warrants by year-end, bringing the total to 43 warrants in the domestic market, Group Southeast Asia head of derivatives Barnaby Matthews said.
He said of the 43 warrants, 15 would be index warrants, comprising eight KLCI warrants and seven Han Seng Index warrants, while the rest would be structured warrants.
"We are going to unveil more warrants and we are also planning to introduce a different index next year as we expect index warrants will be popular in the next few years," he told a media briefing on the trends and insights on structured warrants here today.
Structured warrants are proprietary instruments issued by a third-party issuer, namely an eligible broker or financial institution that give holders the right, but not the obligation, to buy or sell the underlying instruments in the future for a fixed price.
On the Malaysian market trend, Matthews said that most of the warrants issued in the country was based on long tenure expiration, compared to neighboring countries like Singapore and Thailand.
He noted that tenure of eight months was common in the local market, while for the two countries, they were actively involved in warrants transaction within one month to four months.
Matthews said that high brokerage fees in Malaysia would slow the market activity in general.
"It is unhealthy for short dated warrants as investors will lose money. Apart from that, to spur growth in the Malaysian market, there is a need to increase transparency and educate people on the structured warrants," he said.-- Bernama
