Over the past two weeks, penny stocks have been dominating the top active lists. More importantly, a bulk of these active penny stocks have appreciated in prices.
Kuala Lumpur: Interest on penny stocks is on the rise again, a sign of renewed confidence among retail investors, said brokers and analysts.
Penny stocks are quoted securities that are trading below the RM1 mark. They are seen as studs in a bull market, as retailers clamour for action at the lowest possible cost.
Over the past two weeks, penny stocks have been dominating the top active lists. More importantly, a bulk of these active penny stocks have appreciated in prices.
Interest in penny stocks are mainly driven by retail investors' confidence, added participation of day traders and speculators and the willingness of brokerages to provide margins.
"It clearly shows the return of retail investors, which is also a sign of the return of confidence on the market," Jupiter Securities head of research, Pong Teng Siew, told Business Times on Friday.
Another analyst added that the rally in these penny stocks could be driven by recent gains on blue chip counters.
"Many blue chips have gained significantly over the past four weeks, resulting in a good run last month. A number of these stocks have now become 'expensive'. This may be why investors are now shifting their focus onto penny stocks," said an analyst from a local research house.
Among the top performing penny stocks over the past two weeks are Harvest Court Industries Bhd, which more than tripled from 27 sen to 87.5 sen; Connectcounty Holdings Bhd (+80 per cent); Sanichi Technology Bhd (+54 per cent); Karambunai Corp Bhd (+50 per cent); DVM Technologies Bhd (+18 per cent); GPRO Technologies Bhd (+15 per cent); XOX Bhd (+14 per cent); and Envair Holding Bhd (+10 per cent).
Retail investors' participation in stock market has also increased over the recent days.
So far this month, at least one-third of trades were done by local retail investors and last Thursday, most of the trades were done by retail investors (41.73 per cent local retail participation against 34.98 per cent local institution participation and 23.29 per cent foreign participation).
Data also showed that retail investors were net seller of about RM40 million worth of shares over the past week.
"This is normal, as most retail investors adopt short-term trading mentality, so the net sellers position may probably because they buy low, sell high," added Pong.
While the growing interest signifies the return of retail investors confidence, analysts remained uncertain if it could translate into a year-end mini-bull run.
"I think all signs are pointing to a short-term rally, but it is difficult to determine when it will start or end, or how long it will last," said the analyst who declined to be named.
Kuala Lumpur: Interest on penny stocks is on the rise again, a sign of renewed confidence among retail investors, said brokers and analysts.
Penny stocks are quoted securities that are trading below the RM1 mark. They are seen as studs in a bull market, as retailers clamour for action at the lowest possible cost.
Over the past two weeks, penny stocks have been dominating the top active lists. More importantly, a bulk of these active penny stocks have appreciated in prices.
Interest in penny stocks are mainly driven by retail investors' confidence, added participation of day traders and speculators and the willingness of brokerages to provide margins.
"It clearly shows the return of retail investors, which is also a sign of the return of confidence on the market," Jupiter Securities head of research, Pong Teng Siew, told Business Times on Friday.
Another analyst added that the rally in these penny stocks could be driven by recent gains on blue chip counters.
"Many blue chips have gained significantly over the past four weeks, resulting in a good run last month. A number of these stocks have now become 'expensive'. This may be why investors are now shifting their focus onto penny stocks," said an analyst from a local research house.
Among the top performing penny stocks over the past two weeks are Harvest Court Industries Bhd, which more than tripled from 27 sen to 87.5 sen; Connectcounty Holdings Bhd (+80 per cent); Sanichi Technology Bhd (+54 per cent); Karambunai Corp Bhd (+50 per cent); DVM Technologies Bhd (+18 per cent); GPRO Technologies Bhd (+15 per cent); XOX Bhd (+14 per cent); and Envair Holding Bhd (+10 per cent).
Retail investors' participation in stock market has also increased over the recent days.
So far this month, at least one-third of trades were done by local retail investors and last Thursday, most of the trades were done by retail investors (41.73 per cent local retail participation against 34.98 per cent local institution participation and 23.29 per cent foreign participation).
Data also showed that retail investors were net seller of about RM40 million worth of shares over the past week.
"This is normal, as most retail investors adopt short-term trading mentality, so the net sellers position may probably because they buy low, sell high," added Pong.
While the growing interest signifies the return of retail investors confidence, analysts remained uncertain if it could translate into a year-end mini-bull run.
"I think all signs are pointing to a short-term rally, but it is difficult to determine when it will start or end, or how long it will last," said the analyst who declined to be named.
