Hot Stock KLCI put warrant decline seen 'short-lived' -fund managers

by **Cals** Fri 10 Jul 2015, 00:41

Hot Stock
KLCI put warrant decline seen 'short-lived' -fund managers

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By Gho Chee Yuan / theedgemarkets.com | July 9, 2015 : 1:15 PM MYT

KUALA LUMPUR (July 9): FBM KLCI put warrants declined at afternoon market break, as the Malaysian stock index recovered from substantial losses in recent days.

At 12.30pm, KLCI put warrant FBMKLCI-HK fell two sen or 14% to settle at 12 sen, while FBMKLCI-HM retreated five sen or 13% to 33 sen.

FBMKLCI-HK and FBMKLCI-HM were the eighth and ninth most-active entities across the exchange.

For comparison, the KLCI was up 5.88 points or 0.3% at 1,695.83.

Yesterday, the index fell 16.47 points on concerns over China's share slump, Greece's debt crisis and Malaysia's political uncertainties. A day earlier (June 7), the KLCI fell 4.75 points.

Stock index put warrants and the index have an inverse correlation, hence allowing investors to profit from the warrants' gains in a bearish broader market.

At a glance, the decline in KLCI put warrants today may represent a recovery in the broader market.
But the question is whether the broader market rise is sustainable?

Fund managers said the decline in put warrants was only "short-lived", as they saw further downside in the KLCI.

"I think the fall in put warrants was temporary. I expect the KLCI to remain bearish, at least for another quarter.

"The overall market sentiment is still negative, especially from the (Malaysian) political side, which has dampened investors' sentiment," [size=14]William Capital Sdn Bhd's chief investment officer William Ng told theedgemarkets.com over the phone.

Looking ahead, Ng said he expected the KLCI to hover around 1,650 to 1,750 points.

Meanwhile, Affin Hwang Investment Bank Bhd's deputy head of retail research Norhashmilaidi Hashim said the KLCI was still largely dependent on the US dollar's trend and US equity market's performance.

"I believe the KLCI will continue to trade sideways until August," he said.
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