Weak players to be ousted as competition and costs escalate
The warrant market will consolidate this year with weaker players being ousted, according to KBC Financial Products director Venus Wong.
'One to two issuers are still considering joining the warrant market,' Ms Wong told reporters yesterday. 'But as competition is keen, I expect three to four issuers will slow down their development.'
Last year, the number of issuers increased to 18 from 13.
Ms Wong suggested the narrowing of the implied volatility of warrants and short-term listed options and keen competition would push up costs for issuers, while the growth of warrant turnover might rise only in line with the broad market turnover.
The market had another record year last year with the average daily turnover of the warrant market jumping 66 per cent to $3.46 billion.