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RETAIL STRUCTURED PRODUCTS | Cesar Tordesillas, Malaysia

AmBank issues 6 new call warrants

AmBank issued six European style cash-settled structured warrants.


These were over the ordinary shares of Eversendai Corporation Bhd, DRB-Hicom Bhd, Mah Sing Group Bhd, Malaysian Airline System Bhd, Mudajaya Group Bhd and iShares FTSE A50 China Index ETF.

The structured warrants would have tenures of approximately eight months each with issue sizes of up to 100 million each. All six structured warrants would be listed via the market making method.

Global liquidity was improving and valuations of Chinese large caps, currently inexpensive at 8.6 times 2012 earnings were likely to re-rate. Therefore, AmBank would be introducing a warrant on the A50 China ETF which tracked the performance of the FTSE China A50 Index.

The constituents of the FTSE China A50 Index were 50 of the largest and most liquid Chinese companies making it a good proxy of China’s growth story for the coming decade.

Considering that access to the Chinese equity markets remained somewhat restricted to non-Chinese participants, this made the A50 China ETF which was listed in Hong Kong an attractive investment instrument for investors looking for exposure to the Chinese growth story and was in line with the outperformance of the emerging markets versus developed markets theme.

“Besides the A50 China ETF, AmBank will be launching the first structured call warrant on leading integrated steel contractor Eversendai and four new call warrants on DRBHicom, Mahsing, MAS and Mudajaya,” said AmInvestment Bank Bhd Equity Derivatives director/head Ng Ee Fang.

Integrated structural steel turnkey contractor Eversendai was currently bidding for RM12 billion worth of projects worldwide in locations such as West Asia, Commonwealth of Independent States and South-East Asia.

The new CWs had gearings ranging between 4.76 and 7.21 and were targeted at investors who wanted leveraged exposure to the underlying counters.

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