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WARRANTS of CapitaLand could continue to hog the spotlight this week. They were among the most actively traded single-stock warrants last week, alongside index warrants on the Hang Seng Index and the Straits Times Index.
CapitaLand shares had endured a volatile week of trading, along with other property stocks. Property counters dived on Wednesday as investors reacted to news that the Government was considering a change in the income tax policy for individuals selling real estate.
If the proposal becomes law in January, it will mean that anyone who sells a property in any four-year period will not be taxed on his profit. But a second sale within four years of the first sale may be taxable.
The sell-off saw CapitaLand shares plunging to as low as $3.30 in trading on Wednesday from a high of $3.63 on Monday, before a mild recovery towards the end of the week. It closed 11 cents, or 3.14 per cent lower, at $3.39 last Friday - a 5 per cent fall for the week.
A call contract issued by Macquarie Securities, with a strike price of $3.283 and expiring on Oct 2, was the most actively traded contract last Friday. It fell 2.5 cents to 25.5 cents with 4.72 million units traded.
Investors bullish on CapitaLand can consider a call warrant issued by Macquarie expiring on Nov 3 with an exercise price of $3.80.
On the other hand, those who have a bearish view can consider a put warrant expiring on Dec 4 with an exercise price of $3.70.
A call warrant lets an investor buy into a stock or index at a pre-set price over three to nine months. A put warrant lets an investor sell the stock or index at a pre-set price.
YANG HUIWEN
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