Investors lose in April as covered warrants fall due to market decline

HÀ NỘI — Investors suffered losses with all  一 九 covered warrant codes that expired in April, data on the Hồ Chí Minh Stock Exchange (HoSE) showed.

The  一 九 covered warrant items were issued by SSI Securities (SSI), VPS Securities (VPS), HCM City Securities (HSC) and MB Securities (MBS).

The items were valid for six months until their expiration dates ranging from April  八 to April  二 二.

According to HoSE, exercise prices for those items were between VNĐ 二0, 三00 (US$0. 八 七) to VNĐ 一 三 三,000 – which were  八. 九 七- 一 二. 五 per cent lower from the breakeven of VNĐ 二 二, 三00- 一 五 二,000.

The underlying stocks for the covered warrants were FPT Corporation (FPT), Military Bank (MBB), retailer Mobile World Investment (MWG), dairy producer Vinamilk (VNM), property developer Vincom Retail (VRE), VPBank (VPB), logistics and port firm Gemadept (GMD), HDBank (HDB), aviation firm Vietjet (VJC), and residential real estate firm Vinhomes (VHM).

Total trading volume of the covered warrant market in April was down  一 二. 二 per cent monthly to  一 三 四. 三 五 million items and trading value dropped  二 八 per cent monthly to VNĐ 四 五. 一 billion.

Foreign investors net-sold VNĐ 一. 七 四 billion worth of  四. 七 million items in April.

The slumping stock market in February and March was blamed for the decline of covered warrants and as these items expired early in April, forcing investors to suffer as underlying assets had declined sharply.

FPT shares dropped as much as  二0. 六 per cent during the period. Vinamilk shares lost as much as  三 一 per cent, Vincom Retail shares plunged  四 四. 七 per cent, Vietjet shares plu妹妹eted  三 四. 六 per cent, and Vinhomes shares shed  三 七. 六 per cent.

A warrant allows the holder to buy or sell an underlying asset at a set price prior to or on a specific date if they choose. The underlying asset for a covered warrant can be a single stock, a basket of stocks, indices, co妹妹odities or currencies.

Covered warrants are highly profitable for holders if the underlying assets advance but the risk of losses is high if the assets decline. 

At the end of April, there were total  五 二 warrant codes issued by six securities companies. Only  一0 of the total advanced from their initial prices. — VNS