PETALING JAYA: Kenanga Investment Bank Bhd (Kenanga IB) is banking on Malaysian investors’ growing demand for Chinese financial, infrastructure and technology stocks with the launch of its structured warrants linked to Hong Kong’s key equity benchmarks.
Philip Lim, head of equity markets and group head of equity derivatives at Kenanga IB, said the company – through its machine learning, data combing and engagement with its clients – found that most investors are keen to gain exposure to the Chinese market.
“Hong Kong, as you know, is a gateway into the Chinese economy at this point.
“Many traders and investors are looking for different opportunities apart from the US market amidst the ongoing tariff situation.
“They do not want to be weighted so much on the US markets and are looking for other opportunities in markets like Hong Kong,” he said following the listing ceremony of the structured warrants here yesterday.
Kenanga launched its first-ever Hang Seng China Enterprises Index (HSCEI) structured warrants – HSCEI-CAA and HSCEI-HBA – and Hang Seng TECH Index (HSTECH) structured warrants – HSTECH-C30 and HSTECH-H27 – under its flagship brand NagaWarrants.
The group said the launch marked a strategic expansion of its East Asian footprint, following the successful introduction of Hang Seng Index (HSI) structured warrants – HSI-CIW and HSI-HMO – in 2021.
The HSCEI tracks heavyweight mainland enterprises listed in Hong Kong, including financial and infrastructure giants such as ICBC, China Construction Bank, PetroChina and Ping An Insurance.
It serves as a key benchmark for tracking the performance of China’s largest state-owned enterprises.
The HSTECH, on the other hand, captures the growth of China’s leading tech innovators such as Tencent, Meituan, Xiaomi, and JD.com.
With its focus on fast-evolving technology and innovation, Kenanga also noted that HSTECH is ideal for traders with higher risk appetites looking for volatility and growth potential.
According to Lim, there is currently a divergence between the United States and Chinese markets, especially in the technology sector.
“As an investor, they would like to get into this ecosystem through the HSTECH into the East Asian markets,” he pointed out.
Kenanga Group’s presence in the structured warrants market is underscored by its 64% market share in HSI warrants.
In 2024, the structured warrants segment on Bursa Malaysia recorded a turnover of RM30.3bil, contributing approximately 4% to the exchange’s total market turnover of RM848.7bil.
When asked if the current low participation rate among retail investors would affect the newly listed structured warrants, Lim acknowledged that the low participation rate would not affect both the total market volumes and the warrants market as well.
However, he highlighted a key differentiator for Kenanga’s structured warrants.
“Unlike the local market, our structured warrants are not focused on just one particular market, such as Malaysia.
“If the Hong Kong market happens to be more active, we can issue products that are demanded by our clients in the Malaysian market.” he said.
The HSCEI-CAA call warrant opened at 21.5 sen versus its issue price of 19 sen, while the HSCEI-HBA put warrant opened at 17.5 sen versus its issue price of 20 sen.
The HSTECH-C30 call warrant opened at 23 sen versus its issue price of 21 sen, while the HSTECH-H27 put warrant opened at 15 sen versus its issue price of 17 sen.