With the stock market sell down the past one week, the only instrument in the stock market that is likely to produce profit for its holders is put warrant.  There are a number of local underlying put warrants listed on Bursa Malaysia.  Nevertheless, the volume on these put warrants is not encouraging at all.

The “heaviest” traded of the local underlying put warrants, AXIATA-HA, hit a volume of 560,000 on May 24^th.  This is the highest daily volume of the four local underlying put warrants from inception.

Why is the trading volume for put warrants so low?

The answer may be that there is no information or even worse, inaccurate information on put warrants listed on Bursa Malaysia.

The issuer for the 4 local underlying put warrants, OSK Investment Bank, did not have the put warrants listed on the structured warrants pricing table in its website.  It only contained information and indicators for call warrants.

What is nightmarish for investors is the incorrect premium calculation of put warrants on the trading website of most stock brokers in Malaysia.  Apparently, the premium formula is that of call warrant.

The shares, loan stocks and warrants of Scomi Group was up modestly today ahead of announcements of the company’s subsidiary Scomi Engineering Berhad (SCOMIEN) entering into a conditional share sale agreement with OMS Holdings Pte Ltd, a wholly-owned subsidiary of Sumitomo Corporation Asia Pte Ltd for the disposal of the Machine Shop Business for a total cash consideration of approximately USD101.45 million (RM327.68 million based on the exchange rate of USD1:RM3.23).

Of significant importance is the announcement of SCOMIEN of its intention to distribute RM90 million as special dividends.  Scomi Group owns about 70% of SCOMIEN share capital and close to 90% of SCOMIEN ICULS (SCOMIEN-LA).  It would receive the bulk of the special dividend by SCOMIEN.