Market colour: HSI call dominate gainers table after reports reveal buying from China's "National Team"
The China-related benchmark Hang Seng Index (HSI) July futures was up as much as 2.8% this morning to 25,167, outperforming Asia's developed markets
🔝Currently 2.3% higher (as of 145PM), HSI call warrants are dominating the top warrant gainers table, with gains between 29% to 67%, depending on the warrant's different effective gearing levels, while HSI put warrants are down between 25% to 80%
Top warrant gainers
Top warrant losers
Both call and put warrants are seeing buy flows as of writing, with heavier buying seen in put warrants $HSI 21400MBePW260828(NPXW.SI)$ (https://warrants.com.sg/tools/livematrix/NPXW) and WZ6W (https://warrants.com.sg/tools/livematrix/WZ6W)
📰Bloomberg reported this morning that China Reform Holdings and China Chengtong Holdings Group - two investment firms associated with a group of entities known as the "national team" - announced on Sunday that they have increased holdings of Chinese equities
📺Separately, Chinese state broadcaster CCTV reported that the China Securities Regulatory Commission will hold a meeting today with listed companies for a discussion to promote the stable and healthy development of China’s capital markets
The show of support by the Chinese government has come on the back of reports that Chinese stock traders had on Friday, unwound leveraged positions at the fastest pace since the 2015–2016 market crash
According to Bloomberg, the outstanding balance of debt taken out for stock purchases in Shanghai and Shenzhen fell by 2.8% to 2.75 trillion yuan (USD405 billion) on Friday, the fastest pace of contraction since Jan 2016
Margin balances are generally seen one of the indicators of risk appetite
Looking at specific stocks, some of the bigger gainers as of 205PM today include PetroChina (+4.5%, HKD 10.02), Bilibili (+4.3%, HKD 145.60) and Alibaba (+4.1%, HKD 117.20)
The call warrants tracking these names are seeing gains between 18% to 25%, around four to six times more than the shares, while Alibaba put warrant JCJW has fallen 20%
$PetroCH MBeCW270105(PLMW.SI)$
PetroChina trending call PLMW
$Bilibili MB eCW261005(JZAW.SI)$
Bilibili trending call JZAWA
$Alibaba MB eCW261103(ETKW.SI)$ and $Alibaba MB ePW261005(JCJW.SI)$
Alibaba trending call and put warrants ETKW and JCJW
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