OREANDA-NEWS. Together Japan, Hong Kong and Singapore’s stock markets make up almost 15% of the total capitalisation of all primary listed stocks across the World.  

In the year thus far, the Nikkei 225 Index has declined 4.9% and the Hang Seng Index has declined 6.3%. These total returns, both expressed in terms of Singapore Dollars compare to the Straits Times Index (STI) gaining 1.3%. The relative endurance of the Singapore stock market has also extended to the long run with the ten year gains of the STI one-sixth higher than the Hang Seng Index, whilst the Nikkei 225 Index has ended the 10 year duration with a marginal decline. Over the long run, the Hang Seng Index and Nikkei 225 Index have also been more volatile than the STI.

In the case of the Nikkei 225 Index, the month to date has seen a rise in both the short term and long term volatility gauges. Coinciding with the rise, Nikkei 225 Index Structured Warrant activity has also significantly picked up. Nikkei 225 Structured Warrants showed increased activity with daily averaged traded value up 33% month-on-month. The Nikkei 225 Index Structured Warrants had significant increase in trading activity year-on-year with total turnover up by 6.8 times.

The most active Nikkei 225 Index Structured Warrants in the month to date are tabled below.

Counter Name Stock Code Call/Put Expiry Date Exercise Price April 2016 Traded Value (S$)
Nikkei 225 7,629,983.40
NIKKEI225 15500 MB EPW160610 BOQW P 10-Jun-16 15,500 3,153,123.20
NIKKEI225 18000 MB ECW160610 BONW C 10-Jun-16 18,000 2,211,244.60
NIKKEI225 16000 MB ECW160610 BOMW C 10-Jun-16 16,000 1,259,315.00
NIKKEI225 17500 MB EPW160610 BORW P 10-Jun-16 17,500 512,908.40
NIKKEI225 14500 MB EPW160909 BSGW P 9-Sep-16 14,500 238,611.00
NIKKEI225 18500 MB ECW160909 BSDW C 9-Sep-16 18,500 155,550.00
NIKKEI225 16000 MB EPW160909 BSFW P 9-Sep-16 16,000 98,451.20
NIKKEI225 19500 MB ECW160610 BOOW C 10-Jun-16 19,500 780.00

Source: SGX (data as of 26 April 2016)

As illustrated in the chart below, the Nikkei 225 Index has not gained as much as the STI since early to mid-February. However, the Nikkei 225 Index swung 9% higher from its 6 April low to its 21 April high, while STI has gained 5% over the same period.

Source: Bloomberg (data as of 26 April 2016)

The STI Structured Warrants showed increased activity with daily averaged traded value up 24% month-on-month for April to date. This means that the STI Structured Warrants had significant increase in trading activity year-on-year with total turnover up 15 times.

The most active STI Structured Warrants in the month to date are tabled below.

Counter Name Stock Code Call/Put Expiry Date Exercise Price April 2016 Traded Value (S$)
Straits Times Index 7,109,034.20
STI 2900 MB ECW160630 BODW C 30-Jun-16 2,900 3,181,810.00
STI 2850 MB EPW160630 BOGW P 30-Jun-16 2,850 2,618,962.40
STI 2800 MB EPW160429 BMFW P 29-Apr-16 2,800 457,160.00
STI 2750 MB ECW160630 BOFW C 30-Jun-16 2,750 419,318.00
STI 2700 MB EPW160630 BOHW P 30-Jun-16 2,700 356,624.80
STI 2850 MB ECW160429 BOEW C 29-Apr-16 2,850 47,400.00
STI 2500 MB EPW160831 BPVW P 31-Aug-16 2,500 20,778.00
STI 2650 MB EPW160429 BOIW P 29-Apr-16 2,650    6,981.00

Source: SGX (data as of 26 April 2016)

In the month thus far, Structured Warrants had seen a total of S$416 million in traded value. This represents S$23 million in average daily traded value, which is up 23% month-on-month and 30% year-on-year. The three most active single stock Structured Warrants traded in the month thus far have been DBS, UOB and Keppel Corporation.


Specified Investment Products

Structured warrants are an example of Specified Investment Products (SIPs). The MAS has introduced measures for intermediaries to safeguard the interests of individual investors investing in SIPs, which are products with features that might be more complex in nature.