Buoyant outlook for warrants
Cheah Chor Sor | 27 Jul 2018 00:30

Warrants traded on Bursa Malaysia could see a surge in retail investor interest with the equity market showing gradual signs of recovery after the recent plunge.

With the FBM KLCI and other sub-indices breaking out of the doldrums, the anticipated market recovery provided it is sustainable given concerns of an over-bought position could reflect a healthy spell for both structured and company warrants.

Moreover, warrants tend to be popular with investors during times of increased volatility as market movements provide trading opportunities, according to Macquarie Capital Securities (M) Bhd (Macquarie Malaysia) head of equity derivative Johann Sze.

“Due to the leverage effect, warrants allow investors the potential to increase their returns from movements in market prices, and are one of the few tools available for investors to profit from falls in prices, which is especially useful during volatile times,” he tells FocusM.

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