KUALA LUMPUR (Oct 28): CIMB Group Holdings Bhd’s indirect 99.99%-owned subsidiary CIMB Bank Bhd said on Thursday (Oct 28) that the latter has resumed market-making activities involving structured warrants on the FBM KLCI after resolving technical issues which had earlier disrupted the bank’s market-making activities for the warrants.

"We would like to inform all investors that we have resolved the technical issues that we were facing earlier. We shall now resume our market-making activities on all structured warrants on the KLCI. This announcement is dated Oct 28, 2021,” CIMB Bank said in its Bursa Malaysia filings.

Earlier on Thursday, CIMB Bank said it would like to notify all investors that it was facing some technical problems, hence there would be some disruption in its market-making activities for all structured warrants on the KLCI.

"We will make an announcement once our market-making activities are fully operational,” CIMB Bank said.

In securities-trading terminology, a market maker buys and sells securities to generate liquidity in the market while structured warrants are proprietary instruments issued by third parties such as eligible brokers or financial institutions.

Bursa said on its website: "Structured warrants are proprietary instruments issued by a third-party issuer, namely an eligible broker or financial institution that gives holders the right, but not the obligation, to buy or sell the underlying instrument in the future for a fixed price.”

"Essentially, you are making a 'reservation' to buy or sell a pre-determined number of the underlying instrument at a certain price in the future when you invest in a structured warrant. Structured warrants can be issued over an underlying asset such as share, exchange-traded funds, index or a basket of shares,” Bursa said.

According to bourse regulator and operator Bursa, structured warrants include call warrants, which give holders the right to buy the underlying share at a specified price within a limited period of time while put warrants offer holders the right to sell the underlying share at a specified price within a certain duration.

Bursa said structured warrants include callable bull/bear certificates (CBBC).

"CBBC tracks the performance of an underlying stock without requiring investors to pay the full price required to own the actual stock. They are issued either as bull or bear certificates with a fixed expiry date, allowing investors to take bullish or bearish positions on the underlying stock with the possibility of an early termination before the expiry date when the underlying stock moves in a contrary direction to investors’ expectations,” Bursa said.

At 10:42am on Thursday, CIMB Group’s share price rose two sen or 0.38% to RM5.30 for a market value of about RM54.17 billion. 

CIMB Group’s latest-reported number of issued shares stood at 10.22 billion, according to its Bursa filing on Wednesday (Oct 27).