Bursa-CL Warrant Potential To Generate Profit

Warrants are generally bull market tools. In a bear market, however, warrants tend to drop faster than mother share. By the same token, when there is a price rebound, warrants tend to jump quicker than the mother share. So if investor believes in Bursa's upside, he/she could look at buying its warrant - Bursa-CL

Bursa-CL is launched in Dec 2008 expect at 9 June 2010 with ratio 5:1 exercise price RM5. The warrant which ended at 45.5 sen last Friday, carries a value of RM7.275 = (0.455x5+RM5). The mother share finished at RM7 last Friday.























Now in short term the KLCI will have a correction and may drop a bit below 1,000 in coming next month and by next year 2010 economic will sure get improve compare this year so Bursa sure will moving up and Bursa-CL will bounds more higher.

Bursa-CL which was issued at 24.5 sen, dipped to a low of 8.5 sen on March 16 before rebounding to 54 sen on May 12. This means it jumped 535% over these two months. Next run of Bursa will be a good opportunity to make profit by warrant.

Target Price from research house:-

1. AmResearch raised its fair Bursa value to RM8.40 from RM6.20 so Bursa-CL will be 68 sen
2. Kenanga Research upped its target price to RM9.30 from RM5.10 so Bursa-CL will be 86 sen
3. CIMB raised its target price Bursa value to RM8.00 from RM7.50 so Bursa-CL will be 60 sen

While investors who have capital in hand may be untested in buying the Bursa share, those looking for cheaper entry into the stock and who believe local market sentiment will continue to improve may find Bursa-CL more appealing.

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