AmInvestment Bank Berhad launches its new Base Prospectus, along with the introduction of its AmWarrants Portal and a pair of Put and Call Warrants over Hong Kong Exchanges & Clearing (HKEC).
The launch of the new Base Prospectus took into account the new regulations under the Securities Commission and Bursa Malaysia for the issuance and listing of structured warrants. The new Bursa Malaysia guidelines, which allow put warrants to be issued in addition to call warrants, took effect on 3 August 2009 and are timely in this period of marked market volatility.
AmInvestment Bank has two warrant programmes – its regular warrant programme targeted at sophisticated investors who want to take leveraged positions on stocks or indices and its zero or low strike warrant programme which is targeted towards long-term investors who want greater access and growth over the medium term. The previous issue under the latter was the 100 million Berkshire B Zero Strikes at RM1 each.
Given the extreme volatility of today’s market, AmInvestment Bank is launching a pair of warrants, a put and a call, over the same underlying stock, chosen for its long-term prospects and short-term trading volatility. "This offer is targeted at short-term sophisticated traders who want to bet on the volatility of Hong Kong Exchanges & Clearing (HKEC), which has historically had price movements of up to HKD16.95 or 27 percent a day. Currently, it is a trader's market although long-term investors have manifold opportunities if they can ride out the volatility. At this point in time, traders will want to be able to long or short volatile stocks, and our pair of put and calls give them a chance to monetize this on a leveraged basis, said Ng Ee Fang, Director/Head, Equity Derivatives, AmInvestment Bank Berhad."
The put warrant on HKEC is the first put warrant listed in Malaysia, and enables investors with a bearish view to profit from a fall in HKEC’s share price.
Both the HKEC warrants have an exercise price of HKD143.90, equal to the volume weighted average price of HKEC on 5 August 2009. The warrants have a tenure of 18 months and an exercise ratio of 125 warrants to one HKEC share.
The new guidelines expand the range of assets that warrant buyers can get exposure to and the new listing and market making rules are expected to increase liquidity and volume of Malaysia's warrant market. In order to provide new issues and listing information to the public, as well as collate a source for the active warrant market, AmInvestment Bank introduces its warrant trading portal, AmWarrants.com. The public will be able to access the term sheets and prospectuses for all of AmInvestment Bank's warrant issues as well as obtain live pricing for all listed warrants in Malaysia. They will also be able to view the prices for the foreign underlyers which are the basis of some of these warrants, as well as trade the warrants through the website.
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