KUALA LUMPUR Harvest Court Industries Bhd became the first stock to be designated in five years yesterday but analysts do not think it will result in a heavy selldown in penny stocks.
Bursa Malaysia has designated Harvest Court shares and warrants from November 16 which means that investors will have to pay cash upfront to trade in these securities.
"The decision to designate the securities ... is due to excessive speculation observed in the trading of both securities and has been taken in the interest of ensuring a fair and orderly market," Bursa said in a statement.
Harvest shares have surged to RM2.13 on November 14 from just eight sen on October 12.
"A designated stock is not really a concern to real investors. The issue will fade after a short while and buying will continue for the bigger cap companies, including for selected penny stocks," said Mercury Securities head of research, Edmund Tham.
"We expect it to only affect the sentiments of punters. For real investors, there is no real impact as there are still a lot of stocks to buy out there," Tham told Business Times.
The last stock to be designated was Iris Corp Bhd on May 11 2006.
It was designated due to excessive speculation and unusual patterns observed in the trading of its shares. The stock rose 1,500 per cent over eight months.
OSK Investment Bank head of research Chris Eng said the best strategy for investors is to remain defensive.
Bursa Malaysia has designated Harvest Court shares and warrants from November 16 which means that investors will have to pay cash upfront to trade in these securities.
"The decision to designate the securities ... is due to excessive speculation observed in the trading of both securities and has been taken in the interest of ensuring a fair and orderly market," Bursa said in a statement.
Harvest shares have surged to RM2.13 on November 14 from just eight sen on October 12.
"A designated stock is not really a concern to real investors. The issue will fade after a short while and buying will continue for the bigger cap companies, including for selected penny stocks," said Mercury Securities head of research, Edmund Tham.
"We expect it to only affect the sentiments of punters. For real investors, there is no real impact as there are still a lot of stocks to buy out there," Tham told Business Times.
The last stock to be designated was Iris Corp Bhd on May 11 2006.
It was designated due to excessive speculation and unusual patterns observed in the trading of its shares. The stock rose 1,500 per cent over eight months.
OSK Investment Bank head of research Chris Eng said the best strategy for investors is to remain defensive.
