KUALA LUMPUR (July 7): Kenanga Investment Bank Bhd (KL:KENANGA) is tapping into rising investor interest in Hong Kong-listed Chinese companies by launching a new series of structured warrants under its NagaWarrants brand. Structured warrants let investors trade on the rise or fall of a stock or index with a small upfront cost, without actually owning the shares.

These new products offer exposure to two key Hong Kong indices: the Hang Seng China Enterprises Index (HSCEI) and the Hang Seng TECH Index (HSTECH), giving Malaysian investors access to China's biggest state-owned firms and leading tech giants.

HSCEI includes major names like ICBC, China Construction Bank and PetroChina, while HSTECH features top tech players such as Tencent, Xiaomi and JD.com. These indices are particularly attractive to those unable to access stocks listed directly in mainland China due to regulatory barriers. HSTECH, in particular, caters to investors seeking growth and volatility.

Kenanga’s deputy head of equity derivatives Kenneth Teoh explained that many global investors are not able to directly trade mainland Chinese stocks without a special licence, which is hard to obtain. As a result, HSCEI has become a preferred route for international exposure to Chinese markets.

Kenanga’s latest structured warrants — all warrants HSCEI-CAA and HSTECH-C30, and put warrants HSCEI-HBA and HSTECH-H27 — were officially listed and began trading Monday, aiming to meet growing demand for Greater China market access.

Philip Lim, head of equity markets and group head of equity derivatives, acknowledged that slow retail activity on Bursa Malaysia has impacted warrant trading. However, he said Kenanga is using data and machine learning to monitor investor interest in global market-linked structured products and may expand to other Asian markets like Singapore and Indonesia if demand increases.

Lim also highlighted that all of Kenanga’s operations, including hedging, are based entirely in Malaysia. This keeps profits and tax revenues local, supporting the national economy and the development of Malaysia’s financial services sector. It also gives the firm a pricing edge over competitors with overseas operations, as they face extra costs from cross-border transactions.