THE buzz created by last week's listing of CapitaMalls Asia (CMA) - the biggest initial public offering (IPO) here in 16 years - is triggering keen interest in its contracts.
Investors who wish to take advantage of a possible upside on the counter may consider a CMA call warrant offered by Macquarie Securities - the only contract of its kind in the market. This warrant has an exercise price of $2.25 and expires on May 5 next year.
It has been actively traded since it was listed, with 9.9 million units done last Wednesday and about 6.1 million changing hands last Thursday. The contract gained 1.5 cents to close on 30 cents last Thursday.
CMA's IPO raised $2.8 billion, and was Singapore's largest since SingTel's in 1993, which raised more than $4 billion.
CMA made its trading debut last Wednesday, gaining about 8.5 per cent from its offer price of $2.12 to close at $2.30. It shot up to as high as $2.39 the next day before closing unchanged at $2.30.
CMA, a shopping mall unit of CapitaLand, has a $20.3 billion portfolio of 86 malls here, in China, Malaysia, Japan and India. The majority - 50 properties - are in China, including 18 still under development.
CIMB-GK noted: 'The IPO has unleashed a pan-Asia retail mall
behemoth with strong debt and capital market capacity to execute asset recycling.'
The broker noted that parent CapitaLand's success with this model has typically led to its share- price outperformance.
A call warrant lets an investor buy into a stock or index at a pre-set or strike price over a period of three to nine months. A put warrant allows an investor to sell the stock or index at a pre-set price over a period of time.
Source: Straits Times, 30 Nov 2009