Hot Stock AMMB Holdings down 2.66% on profit-taking from trading of put and call warrants

by **Cals** Mon 06 Jul 2015, 23:21

Hot Stock
AMMB Holdings down 2.66% on profit-taking from trading of put and call warrants

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By Meena Lakshana / theedgemarkets.com | July 6, 2015 : 1:29 PM MYT

PETALING JAYA (July 6): [size=14]AMMB Holdings Bhd ([You must be registered and logged in to see this image.] Financial Dashboard) shares fell 16 sen or 2.66% to RM5.85, on the back of traders cashing in on the trading of put and call warrants on the KL Composite Index (KLCI).

At 12.30pm, a total of 1.26 million shares were traded. The stock reached a high of RM5.97 and a low of RM5.84.

It is one of the top 20 decliners on Bursa Malaysia today.

When contacted, a remisier, who requested for anonymity, said AMMB Holdings (fundamental: 1.7, valuation: 3) was one of the stocks declining on market makers' move to use the opportunity rising from the decline of the KLCI, to make profits from the trading of put and call warrants.

“Traders are using the political story to weigh down on the index, and then to make profits from (the trading of) put and call warrants,” he said.

“This is because, the trading volume (of AMMB Holdings) is very little. The volume is insignificant.

“Once clarifications are made in the political sphere, the market should rebound,” he added.

He said other counters declining on this phenomena include SapuraKencana Petroleum Bhd ([You must be registered and logged in to see this image.] Financial Dashboard), RHB Capital Bhd ([You must be registered and logged in to see this image.] Financial Dashboard) and Hong Leong Financial Group Bhd ([You must be registered and logged in to see this image.] Financial Dashboard).

The remisier said even though the KLCI had dropped 22.6 points in the intra-morning trade, the volume of shares traded across the top-30 index-linked counters were small and insignificant.

The KLCI declined 22.6 points or 1.3% to 1711.64, with a wide negative market breadth of 6.77, which saw 630 decliners against 93 gainers.

“If you look at the top 50 most active counters this morning, almost 30% of it comprises of put and call warrants,” he added.

The Edge Financial Daily had reported today that put warrants were actively traded again today, as growing pessimism lingers in the local market.

Traders’ sentiments were hammered by Greece’s referendum result for a no-go on austerity measures and graft allegations against Prime Minister Datuk Seri Najib Razak.

The Greek referendum saw 61.3% of voters reject the austerity measure proposed by the country’s debtor, and dragged down most of Asia’s key market index indicator.

Japan’s Nikkei fell 2.44%, while Hong Kong’s Hang Seng declined 3.18%.

The Wall Street Journal had reported last week that about US$700 million from various agencies linked to1Malaysia Development Bhd (1MDB), ended at Najib’s private bank account at AmIslamic Bank, prompting political analysts to express concerns on local political stability, despite a quick denial from the Prime Minister’s Office last week.

At 10:48am, put warrant such as FBMKLCI-HB index surged 15.91% or 3.5 sen apiece to 25.5 sen per unit. Other put warrants that increased significantly include FBMKLCI-HM (up 14.82%), FBMKLCI-HG (up 14.29%), and FBMKLCI-HL (up 14.12%).

Meanwhile, FBMKLCI-HK index and FBMKLCI-HG were heavily traded, with 19.12 million shares and 14.55 million shares traded as of 10:57am. The former climbed 13.64% or 1.5 to 12.5 sen, while the latter increased 14.29% or two sen to 16 sen per unit.

(Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)
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