Warrants Highlight

Look Past the Recent Uncertainty with Long-dated Warrants

Macquarie is pleased to list the following new long dated warrants this morning:

The equities markets have been trading sideways for the past few weeks due to the lack of significant developments in the European crisis. As the much anticipated Bernanke’s Jackson Hole speech turned out to be a non-event, it further dampened the markets volatility. Now that the world leaders each try to ‘kick the own can further down the street’, some investors may want to look past all this noise and focus on their long term views of the market.

Investors who are uncertain about the near future but remain bullish on the longer term, could leverage their views with Macquarie’s long-dated call warrants.

Long dated warrants
With long dated warrants, you pay only a fraction of the share price up front and get exposure to the capital movements in the underlying share over the life of the warrant. The advantage of warrants over many other geared products is that your losses are limited to your initial capital and do not contain margin calls.

The following are some of the warrants with more than 6 months to expiry:

Lower time decay, more conservative choice
One of the concerns of longer term investors is the time decay of warrants. The shorter dated a warrant, the higher the rate of decay. Hence longer term investors may actually look for warrants that have a longer lifespan, as the rate of time decay is much less than the shorter dated warrants.

Longer dated warrants tend to have lower effective gearing compared to shorter dated warrants. Thus they tend to be more suited for more conservative investors who may not have an aggressive or high risk profile.

Other new warrants
On a separate note, Macquarie is also listing the following warrants this morning:

Singapore Market Wrap

Asia falls on downgrade of EU outlook

Moody's lowered the outlook for the European Union from stable to negative. Previously, the credit rating agency had lowered the ratings outlook of Germany, Luxembourg and the Netherlands to negative. According to Moody's, Britain, France, Germany and the Netherlands make up 45% of the budget revenue thus "it is reasonable to assume that the EU's creditworthiness should move in line with the creditworthiness of its strongest key member states".

With that, major Asian indices trended lower on concerns. Asia's largest economy China said that it "may expand exporters' tax rebates to help them cope with the slump in trade growth" as quoted from Bloomberg. Formally, Premier Wen Jiabao had pledged "fine tuning" policies to cope with slowing exports.

The STI closed at 3011.94, down 0.2% dod while the HSI closed at 19429.91, down 0.7% dod.

STI 3100MBeCW121031 (Q1AW) exercise level 3,100.*
STI 2950MBePW121031 (Q0ZW) exercise level 2,950.*

HSI19400MBeCW121030 (Q7KW) exercise level 19,400.*
HSI19000MBePW121030 (Q7LW) exercise level 19,000.*

Bursa-SGX link to start on Sept 18
The Business Times reported that the Asean trading link will begin on September 18, provided it does not get postponed again. With the new link, traders in Malaysia and Singapore will be able to directly trade stocks on both exchanges. This may increase trading volumes in both exchanges, translating to more revenue.

A SGX spokesperson said that "The Asean trading link is designed to facilitate more efficient cross-border trading" and while they do not expect an immediate large increase in cross-border trades, "growth will come as the clients of large and small intermediaries experience the new ease of cross-border transactions".

SGX closed at $6.99, down 0.1% dod.

Call warrant SGX MB eCW121204 (Q0PW) exercise price $6.50.*
Call warrant SGX MB eCW121203 (Q0LW) exercise price $7.50.*
Put warrant SGX MB ePW121204 (Q4TW) exercise price $ 6.60.*

Ezra's Triyards slated to list on 11 Oct
Triyards, the fabrication and engineering arm of Ezra Holdings aims to list on the SGX mainboard on 11 Oct. Approximately a third of Triyard Holdings will be distributed to Ezra shareholders as a dividend in specie.

Chairman on Triyards, Lionel Lee said that the intention of Triyards being independent is "to be able to look at acquisition targets or new business lines". Also, he added that Triyards offshore equipment business may possibly contribute a third to the overall turnover after 2 years.

Ezra closed at $1.08, up 0.5% dod.

Call warrant Ezra MBeCW121101 (QD8W) exercise price $1.10.*

Overnight Market Wrap

S&P reverse losses from disappointing ISM figures

Last night, the Institute of Supply Management's factory index fell to 49.6, missing estimates from a Bloomberg survey of 50. A 50 reading borders the case of an expansion and contraction while a reading below 50 signals contraction. The drop in manufacturing figures is evident globally, from US to Asia. The S&P fell on worries that the world's biggest economy is heading for a slowdown.

Fortunately, the index reversed and pared losses on speculation that the European Central Bank might release details of bond purchases to deal with the debt crisis during the policy meeting due tomorrow. Apple, the world's most valuable company rallied 1.5% as they sent out invitations to a product event on 12 September. Market participants are hopeful that a new iPhone is on the table.

The S&P closed at 1404.94, down 0.1% dod and the NASDAX outperformed the Dow Jones and S&P, closing 0.3% up dod.

Overnight Markets

Indices	Last	Change
STI	3011.55	-0.2%
HSI	19429.90	-0.7%
DJIA	13035.90	-0.4%
S&P 500	1404.94	-0.1%
Nasdaq	3075.06	0.3%
China A50	7027.11	-0.8%

Corporate News

Corporate Announcements

Ex-dividend dates:
Wed 26 Sep: SGX ($0.15)
Tue 6 Nov: Olam ($0.05)