Malaysia Gets Warrants Listing Via Macquarie as Sophisticated Investors Seek Opportunities

Macquarie Group’s Malaysian business unit, Macquarie Capital Securities (Macquarie), has reported the launch of its first Structured Warrants on the country’s main cash and derivatives trading venue. The financial institution will join the growing number of providers issuing structured products as Malaysia undergoes positive reforms in its financial and capital markets.

Macquarie, a leader in regional structure products will launch over thirty warrants on key Malaysian products. The firm reported that its first issuance will be; AirAsia X, Berjaya Corp, DRB-Hicom, Hong Leong Industries, Inari Amertron, KNM Group, and MY E.G.

Barnaby Matthews, Head of Derivatives for Macquarie in South East Asia, commented about the firm’s new product launch, he said: “Macquarie has a long history of participation in the warrant markets and was the first issuer to launch a structured warrant in the Asia-Pacific in 1991. Malaysia has a large and growing base of retail investors that are well suited to warrants. We believe that Macquarie can make a positive contribution towards the growth of the warrant market in Malaysia, and will be working closely with the Bursa and the local brokerages to develop the market.”

Asian economies continue to position themselves as attractive centres for foreign investment. Malaysia has been one of the fastest growing economies in the region as it surpassed six percent GDP growth for the last quarter, this year. The new issuance of sophisticated products adds to the country’s diverse offering of financial instruments including, equities, fixed income, futures and options and commodity derivatives.

Malaysia recently launched a new information portal for retail investors, Bursa Market Place; it aims to bolster participation as the county’s reliance on financial services increases. Malaysia is classified as a leader in Islamic financial services.

Dato’ Tajuddin Atan, Chief Executive Officer of Bursa Malaysia, commented in the briefing: “Bursa Malaysia is pleased that Macquarie is expanding its Malaysian franchise to include the equity derivatives business. We are also encouraged by Macquarie's commitment to investor education and hope that the presence of Macquarie as a warrant issuer in Malaysia will contribute to the vibrancy of our capital market.

Building depth and diversity as well as elevating the quality of products is key to the success of any Exchange. However, if Malaysian investors can access other markets, indexes and assets without the risks of going offshore, that would certainly add to the appeal of the local marketplace. And this is where equity derivatives, specifically structured warrants, can play a part.”

Warrants are securities products that operate in a similar fashion to options; they give holders the right but not the obligation to buy the underlying security at a certain price, quantity and future time. The warrant differs from options in reference to its issuance, unlike an option in that a warrant is issued by a company, whereas an option is an instrument of the Stock Exchange . The security represented in the warrant (usually share equity) is delivered by the issuing company instead of by an investor holding the shares.