Call Warrant updates as at December 12

The call warrants' prices dropped for the first time after a strong run-up in the past few weeks. Their prices have declined by an average of 7.95% from December 8 while the underlying share prices have eased off by 1.01% during the same period (see Table 1 below). Despite the sharp drop in call warrants' prices, the average premium has inched up from 13.12% to 13.28%. The worst performing call warrant is Scomi-CA, which has lost 50.0% in just 4 days. This is one call warrant that you should avoid because of its short tenor to expiry & its underlying share is trading at a price (of RM0.97 as at Dec 12) that's lower than the call warrant's exercise price (of RM1.15 as at Dec 12).


Table 1: Changes in Call warrants' prices, underlying share prices & premium from Dec 8 to Dec 12

The usual Call Warrants update is posted here for your easy reference. The cheap call warrants are highlighted in yellow while 2 call warrants that are due to expire in January 2007 (i.e. Astro-CA & Scomi-CA), have their expiry dates highlighted in pink and the 4 call warrants that are due to expire from February to April 2007 (i.e. BJToto-CA, Bursa-CA, IOI-CA & TM-CB) have their expiry dates highlighted in orange.


Table 2: Call warrants' intrinsic value & premium as at Dec 12

If the CI breaks its uptrend line at 1087 level, I expect the consolidation of the market to last for a few weeks. In such a scenario, the call warrants' prices are likely to drop further. Avoid the call warrants for a while.