In fact, the volume traded in the three banks - DBS Group Holdings, United Overseas Bank (UOB) and OCBC Bank - comprised 40 per cent of the total volume of warrants traded yesterday, said Mr Barnaby Matthews, head of warrants at Macquarie Securities.

Bank shares rose strongly yesterday: DBS was up $1.80 to $21.30, UOB rose $1.30 to $21.20 and OCBC advanced 55 cents to $8.60.

Last Friday, the warrants volume proportion represented by the three banks was 30 per cent.

Most action was in call warrants, reflecting the feeling among many investors that bank stocks had been oversold and that the local institutions have minimal exposure to the United States sub-prime mortgage market.

A Macquarie warrant on DBS, with a strike price of $21.20, rose 6.5 cents to 22.5 cents on a volume of 31.9 million units.

Another Macquarie warrant on UOB, with an exercise price of $22, rose four cents to 18 cents with 29.5 million units changing hands.

OCBC warrants were less active but a Macquarie call warrant, with an exercise price of $8.60, rose 5.5 cents to 18 cents on a volume of 6.8 million units.

LEE SU SHYAN

sushyan@sph.com.sg