SC cautions investors on speculative penny stocks

KUALA LUMPUR: Securities Commission (SC) chairman Tan Sri Zarinah Anwar has warned investors to be cautious over the rising number of penny stocks whose prices have skyrocketed of late without material corporate developments.

“I would like to remind investors that they have to exercise caution and make informed investment decisions. Everybody has a role to play in terms of ensuring fair and orderly trading in the market,” Zarinah commented when asked about the growing speculative interest in penny stocks.

She noted that the SC and Bursa Malaysia have surveillance systems in place and monitor all price movements for all counters listed on the exchange.

“Action will be taken depending on the outcome of our surveillance,” she told reporters on the sidelines of the 5th International Islamic Capital Market Forum yesterday.

Recently, penny stocks, particularly on the ACE Market, have seen heavy trading volume and sharp spikes in share prices. Despite poor financial results, these stocks have garnered strong speculative interest.

Among the counters, notably, is Harvest Court Industries Bhd. In barely four weeks, the stock has jumped 16 times from 8.5 sen to RM1.40 yesterday.

The company saw the emergence of a new shareholder, Datuk Raymond Chan, who bought part of his 13.83% stake from the company’s managing director Ng Swee Kiat. Ng later proposed to Affin Bank Bhd to acquire the bank’s 18.3% equity interest for 25 sen per share.

Other penny stocks that have joined the euphoria include Karambunai Corp Bhd, Envair Holdings Bhd, Focus Dynamics Technologies Bhd, Sanichi Technologies Bhd and GPRO Technologies Bhd.

Bursa has queried some of these counters on unusual market activity (UMA). Most of them have replied by saying the board is not aware of any material corporate developments in the companies. Those queries, however, do not seem to have stopped some of those counters from climbing further.

Asked about the share swap deal between state investment arm Khazanah Nasional Bhd and Tune Air Sdn Bhd of shares in Malaysian Airline System Bhd (MAS) and AirAsia Bhd, Zarinah said the SC is reviewing all the trading data. “We will make a decision upon our review and determination of our findings.”

There is no time frame for the investigation, she added.

Deputy Finance Minister Datuk Dr Awang Adek told the Dewan Rakyat last week that the SC and Bursa have launched an investigation into the swap deal involving MAS and AirAsia shares. He said the probe would also look into the possibility of insider trading and will take time because it involves many accounts and a huge value.

He said if the probe finds evidence of insider trading, the Malaysian Anti-Corruption Commission may also be invited to investigate.

Under the swap deal announced in August, Tune Air and Khazanah, major shareholders of AirAsia and MAS respectively, agreed to swap their shares in the two airlines. After the swap, Tune Air now owns 20.5% equity interest in MAS, while Khazanah holds a 10% stake in the low-cost carrier.

investor fear nt traders like us [You must be registered and logged in to see this image.]

phoenix wrote:investor fear nt traders like us [You must be registered and logged in to see this image.]

you did earned much cos of this...lols,against what sc advice.,

No use of the warning. Small investors are bees to the honey. Some sharks goreng the stocks left pocket right pocket and the market will be crazy to buy penny stocks. Their eye only see 0.005 higher, 0.01 higher, cheap cheap so still can pay higher price to bid. They lose the cool to see these are actually price 20% higher, 33% higher.

W wrote:

phoenix wrote:investor fear nt traders like us [You must be registered and logged in to see this image.]

you did earned much cos of this...lols,against what sc advice.,

n kena much too whn the penny drops [You must be registered and logged in to see this image.]

Actually buy penny stock is ok, but very often small investors make 2 critical mistakes

- buy the stocks when the price has up 2 or 3 ticks in a single day. They overpay and once profit takers commence cash out, they will panic. This is typical chase high, buy high, kena stuck and sell low.

- hold the penny stocks long term. Even the CEO and directors themselves dun know whether their company will survive for 6 mths, why should we think we know better than them?

Laughing Gor wrote:Actually buy penny stock is ok, but very often small investors make 2 critical mistakes

- buy the stocks when the price has up 2 or 3 ticks in a single day. They overpay and once profit takers commence cash out, they will panic. This is typical chase high, buy high, kena stuck and sell low.

- hold the penny stocks long term. Even the CEO and directors themselves dun know whether their company will survive for 6 mths, why should we think we know better than them?

again buy sell q is your friend when playing penny...a trick i always use i enter last minute for penny...

say buy sell q is 8 8.5 and 8.5 have say 15k lot.....i enter when people take until 2-3k left.....chance to win is higher.....(for max different lah....he eat all [You must be registered and logged in to see this image.] n eat the bid in front of it too....)

so if it crash mar throw it to the buy q lor.....8.5 [You must be registered and logged in to see this image.] so you have high chance to win and low chance to lose [You must be registered and logged in to see this image.] ....since its penny fee tend to be alot lower too [You must be registered and logged in to see this image.]

thanks for tips +1 = 192!

edit: interesting trade idea, entry & exit strategy

Indeed, I always do like that also :D +1

ESH wrote:Indeed, I always do like that also :D +1

bt if max think its a good entry we all eat grass [You must be registered and logged in to see this image.]

also laughing gors advice is important.....never go for long term in penny and whn day trading....nt smart to chase 2-3 bid higher....

usually syndicate is collecting months and months.....for instance kbunai syndicate hari2 sapu 50k lot pt in portfolio at 10-13cts....suddly 2 weeks ago goreng to 20ct every one sapu sure hangus lor....ppl avg 12ct....ur avg 21 ct how to survive [You must be registered and logged in to see this image.]

Tomoro will still be penny's play.

Next week will still be penny's play in fact.

+1 for LG & Phoenix advice ; not free t monitor these 3 days got itil to attend

hopefully on thurs for a roaring market

Dear all, "the place" is roaring about DPS and harvest. Seem to attract a lot of attention. You guys might want to keep a lookout for these 2 shares. cheers.

Dear all, be careful when you punt penny stocks with very little outstanding shares e.g. below 100m. First, because directors and stakeholders oredi holding 50% and if they did not make any announcement, it will be weird if the share price rise madly and volume is extremely large. SC lately like to suspend transaction evidencing "abnormal activity" and next day the price will tumbling down again.

Laughing Gor wrote:Dear all, be careful when you punt penny stocks with very little outstanding shares e.g. below 100m. First, because directors and stakeholders oredi holding 50% and if they did not make any announcement, it will be weird if the share price rise madly and volume is extremely large. SC lately like to suspend transaction evidencing "abnormal activity" and next day the price will tumbling down again.

+1 to Laughing Gor n Phoenix zai! thanks for caring for us LG [You must be registered and logged in to see this image.]

Dear all, did you all follow my post yesterday and whack DPS or harvest?

I sold too early so make little.

Hope you all huat like pig head.

Laughing Gor wrote:Dear all, did you all follow my post yesterday and whack DPS or harvest?

I sold too early so make little.

Hope you all huat like pig head.

yes we did alot of comrades make 5 figure thank to your tips [You must be registered and logged in to see this image.]

Laughing Gor wrote:Dear all, did you all follow my post yesterday and whack DPS or harvest?

I sold too early so make little.

Hope you all huat like pig head.

I missed it! but can see there is a God in that place [You must be registered and logged in to see this image.]

if God u read this, pls come here n be the BC santa clause ya! I will give u 100 reps! [You must be registered and logged in to see this image.]

Today Ingens got big buy volume but price didn't go up too much. Tomoro can monitor a bit. My 2 sens.

Laughing Gor wrote:Dear all, did you all follow my post yesterday and whack DPS or harvest?

I sold too early so make little.

Hope you all huat like pig head.

Thanks for your good call

To those thinking of catching DPS wave tomorrow, watch out

Monday, 14 Nov 2011
6:27PM DPS-Unusual Market Activity ("UMA") query by Bursa Securities
5:24PM Eric Sow Yong Shing (1,212,500 Shares Disposed)
5:24PM Datuk Dr. Sow Chin Chuan (1,212,500 Shares Disposed)
5:24PM Datin Chu Kim Guek (1,212,500 Shares Disposed)
5:23PM Eric Sow Yong Shing (1,212,500 Shares Disposed)
5:23PM Datuk Dr. Sow Chin Chuan (1,212,500 Shares Disposed)
5:23PM Datin Chu Kim Guek (1,212,500 Shares Disposed)

Laughing Gor wrote:To those thinking of catching DPS wave tomorrow, watch out

Monday, 14 Nov 2011
6:27PM DPS-Unusual Market Activity ("UMA") query by Bursa Securities
5:24PM Eric Sow Yong Shing (1,212,500 Shares Disposed)
5:24PM Datuk Dr. Sow Chin Chuan (1,212,500 Shares Disposed)
5:24PM Datin Chu Kim Guek (1,212,500 Shares Disposed)
5:23PM Eric Sow Yong Shing (1,212,500 Shares Disposed)
5:23PM Datuk Dr. Sow Chin Chuan (1,212,500 Shares Disposed)
5:23PM Datin Chu Kim Guek (1,212,500 Shares Disposed)

those who are holding be careful.....