Hang Seng Index issues enjoy big boost

CHINA'S move to allow domestic banks to invest in overseas equity markets gave a big boost to Hong Kong blue chips and China-linked stocks.

As a result, covered warrants on the Hang Seng Index traded in Singapore also got a major fillip.

Yesterday, the Hang Seng Index ended up 511.03 points at 20,979.24, an all-time high.

A call warrant from Macquarie Bank with a strike level of 20,600 points was among the most actives.

It soared 22.5 cents or 96 per cent to close at 46 cents. More than 16 million units were traded.

A call warrant lets an investor buy into a stock or index at a pre-set price over a period.

Generally, call warrants on the Hang Seng surged. Even if volume was limited, there were rich pickings to be had. For example, another Macquarie call warrant, with a strike level of 20,200 points for the Hang Seng, jumped 28.5 cents to 85.5 cents.

Although only 794,000 units were traded, the warrant had registered a rise of 50 per cent.

Put warrants on the Hang Seng, giving the right to sell the benchmark, lost ground.

One issued by Macquarie, with a strike level of 20,200 points, lost 17.5 cents to 25 cents, on a volume of 9.8 million units.

Warrants on China-related stocks enjoyed a strong showing.

A Macquarie call warrant on China Citic Bank, with a strike price of HK$7, gained 2.5 cents to 27.5 cents.