Bank, property contracts Active from Rally

July 22, 2008

WARRANT WATCH
Index, bank and property contracts active from rally

A RALLY yesterday drew investors into fresh positions for warrants linked to key regional indexes and blue-chip Singapore stocks.

Investors were buoyed by Citigroup's second-quarter results last Friday that showed its losses were not as bad as most analysts had anticipated. Markets were also boosted by the downward spiral in crude oil prices.

Bargain hunters went on a buying spree, driving up Singapore stocks to their biggest one-day surge in nearly two months.

The Straits Times Index (STI) rose 71.48 points to 2,919.21.

Call warrants that tracked the STI rose, while put warrants suffered a rare mauling.

Topping the day's most active charts was a Hang Seng Index put warrant, offered by Macquarie Securities, expiring on Aug 28 with a strike level of 21,000 points.

The warrant plunged 8.5 cents to 19 cents on a turnover of 34.7 million units.

Hong Kong's Hang Seng surged 3 per cent to 22,532.9 points in its biggest single-day gain since early April. Next on that list was a DBS Group Holdings call warrant offered by Macquarie.
That contract, which lapses on Dec 3 with a strike price of $19.80, saw 28.01 million units traded. It closed 2.5 cents up at 20.5 cents. DBS shares ended 52 cents higher at $19.18.

Other contracts that were active yesterday included those of Cosco Corp, CapitaLand and City Developments (CDL).

Cosco shares closed nine cents up at $3.12, while CapitaLand shares surged 28 cents to $5.87.
Shares of CDL ended 34 cents higher at $10.86 after rising to as much as $11.18.

Investors for put warrants, on the other hand, had a dismal day.

A call warrant lets an investor buy into a stock or index at a pre-set price over a period of three to nine months. A put warrant allows an investor to sell the stock or index at a pre-set price.

Dealers expect the buying momentum to continue today, driving the market higher.