The STI closed lower for the tenth consecutive day and contrarians bought call warrants over the local index. The index broke the psychological level of 3,000 intraday but managed to close at 3010.89 (-0.8%). Investors were bullish and bought calls over CapitaLand, Wilmar, Ezra and SingTel.

STI investors bought 1.1M of STI 3100 MB ECW131231 (SF9W, -8.8%) , 348k of STI 3250 MB ECW131231 (S9GW, -10.5%) and 600k of newly-listed STI 3050 MB ECW140228 (SZ8W).

CapitaLand opened below $3 on Wednesday and closed at $2.93, representing a 2.3% fall day on day. Investors continued to be bullish on the property developer and took the chance to buy into 1.1M of CAPITALAND MB ECW140303 (SP2W, strike $3.40, -18.8%) as well as 1.5M of CAPITALAND MB ECW131202A (SP4W, strike $3.20, -23.1%).

Wilmar which has been outperforming the STI week-to-date saw investors take home 1.2M of WILMAR MB ECW131202 (S5IW, strike $3.20) which was unchanged for the day. As of Wednesday, S5IW has almost 5M warrants in the hands of investors.

Other warrants which were popular with investors include 850k of SINGTEL MB ECW131202 (RL1W, strike $3.50, -9.1%) and 1M of EZRA MB ECW140303 (SB4W, strike $1, -3.7%). In comparison, both SingTel and Ezra closed 0.6% lower for the day.

The Hang Seng September futures fell 1.5% on Wednesday and investors turned bullish (after buying puts on Tuesday). They sold out of puts expiring in September and bought into the calls. The puts they exited included - 4M of HSI 21400 MB EPW130927 (SO8W, +30%) and 5.6M of HSI 22000 MB EPW130927 (SO9W, +27.9%). Confident HSI investors bought into call warrants, including those listed below.

* 3M of HSI 21600 MB ECW130927 (SP0W, -27.2%)
* 5.2M of HSI 22200 MB ECW130927 (SP1W, -31.8%)
* 2.6M of HSI 22000 MB ECW131030 (ST3W, -20.8%)

Source: Macquarie Research - 29 Aug 2013