Roll-over trade fades to leave market dull
AFTER a spurt of activity in early trading, as traders anticipated big roll-over activity in Hang Seng futures, business went flat as the wave of activity linked to investors moving into September failed to materialise.
Overall turnover was a sleepy 12,815 contracts. In August there were 2,500 contracts traded and in September there were 10,260 contracts traded.
August futures closed at 9,178, down four points on the day and a discount to the cash of 19 points.
September futures rose 23 points to 9,238, a premium over the cash of 41 points.
In index options, implied volatility slid to 21 per cent.
Jardine Fleming said local and overseas investors were buying 9,200 and 9,400 calls along with 9,400/9,800 call spreads.
'However, more distant trade was bearish, particularly in March, where the 8,800 calls were sold,' said the brokerage.
October options open today with strikes ranging from 9,800 to 8,600.
Brokers said the market was pretty dull basically and there was a lot more action in other regional markets.
Open interest for Tuesday saw 11,195 contracts in August, indicating a sizeable number of contracts have been allowed to expire.
In September there were 36,732 contracts. Given the turnover yesterday this indicates quite a sizeable open interest is being built up in September combining those people hedging their bets in September and those interested in warehousing some cash before selectively getting into shares on expected weakness ahead.
In December there were 51 contracts.
Index options in August saw 6,237 calls and 6,707 puts. In September there were 4,764 calls and 8,221 puts. In December there were 3,697 calls and 2,083 puts. In March 1996 there were 669 calls and 523 puts.
Many brokers and strategists were not expecting much out of the September month. They expect a fairly flat period with trading continuing between the 8,800 and 9,800, a range it has held since the start of the second quarter.
Not much is expected from the remaining corporate earnings figures from some of the key property stocks. Interest rates are expected to stay at current levels and the property market remains comatose.