Warrant Handbook

Item
1
Expiry

Each structured warrant has their own expiry date, with the maturity of 6 months up to 2 years.

In accordance with the relevant regulations, the structured warrant will be suspended from trading in the exchange one (1) market days before expiry date, therefore the last trading day of the structured warrant will be two (2) market days before expiry date.

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Item
2
Settlement Calculation for Single Equity Warrants

If you do not sell your structured warrants in the exchange on the last trading day, all cash-settled in-the-money structured warrants will be exercised automatically on the expiry date.

The warrant holder shall receive an amount of cash (if greater than zero) payable in RM, calculated as follows:

Cash Settlement Amount for Call Warrant

= (Closing Price of Underlying Shares – Exercise Price)
                                Exercise Ratio

Cash Settlement Amount for Put Warrant

= (Exercise Price – Closing Price of Underlying Shares)
                               Exercise Ratio

On the Expiry Date, the Closing Price will be based on any one of the following:

  1. The average daily Volume Weighted Average Price (“VWAP”) of the underlying shares (subject to any adjustment as may be necessary to reflect any capitalisation, rights issue, distribution or others) for the five (5) market days prior to and including market day immediately before the expiry date (“Valuation Period”); or
  2. The average closing price of the underlying shares (subject to any adjustment as may be necessary to reflect any capitalisation, rights issue, distribution or others) during the Valuation Period; or
  3. The closing price of the underlying shares on the market day immediately before the expiry date.

In Kenanga Investment Bank Berhad, we take the average daily VWAP approach.

Item
3
Settlement Calculation for Index Warrants

If you do not sell your structured warrants in the exchange on the last trading day, all cash-settled in-the-money structured warrants will be exercised automatically on the expiry date.

The warrant holder shall receive an amount of cash (if greater than zero) payable in RM, calculated as follows:

Cash Settlement Amount for Call Warrant

= (Closing Level of Underlying Shares – Exercise Level)
                                Exercise Ratio

Cash Settlement Amount for Put Warrant

= (Exercise Level – Closing Level of Underlying Shares)
                               Exercise Ratio

On the Expiry Date, the Closing Level will be based on any one of the following:

  1. The final settlement price for settling the corresponding spot-month index futures contracts on the expiry date; or
  2. The closing level of the underlying index on the market day immediately before the expiry date; or
  3. The average closing levels of the underlying index for the five (5) market days prior to and including market day immediately before the expiry date (“Valuation Period”).

In Kenanga Investment Bank Berhad, we will take the final settlement price for settling the corresponding spot-month index futures contracts on the expiry date approach.