Derivative News

SG WARRANT IN FOCUS

  • CapitaLand shares fell by nearly 9% last week to end at $5.74 last Friday. The group’s FY2007 results came in within expectations with 65% of its total revenues derived from its China and Australia operations. Investors who are positive may consider call E2OW.

  • DBS shares closed at $16.68 on Friday. Uncertainties surrounding the US economy continue to plague investors’ confidence. However, Singapore banks are arguably in a better position to withstand shock due to their healthy balance sheet. Investors expecting sentiment to improve in the near future may want to look at call E6KW.

Warrant Name

Code

Type

Strike

Maturity

Effective Gearing

Implied Volatility

CapitaLand SGA eCW080714

E2OW

Call

6.00

14/07/08

5.3 x

49.5%

DBS SGA eCW080728

E6KW

Call

17.60

28/07/08

5.6 x

46.0%


 

 

  • The Hang Seng Index (“HSI”) registered a whopping 1,830 point fall for the whole of last week or 7.5%. Sentiments were battered by more adverse news from the US and that China will take more tightening measures to rein in the country’s escalating inflation worries. Investors who expect the HSI to stage a recovery in view of the sharp fall last week may look at call E6LW whilst those who hold a negative view may consider put E6OW.

Warrant Name

Code

Type

Strike

Maturity

Effective Gearing

Implied Volatility

HSI23200 SGA eCW080429

E6LW

Call

23,200

29/04/08

7.8 x

49.8%

HSI22600 SGA ePW080429

E6OW

Put

22,600

29/04/08

5.8 x

54.0%

Source: SG and Bloomberg (07/03/08)



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