Thursday, August 21, 2014

Just for my record....stock volume crossed 7 billions

(The Star) PETALING JAYA: It was a record-setting day yet again on Bursa Malaysia, with total volume reaching a fresh high on consecutive days and the volume of shares traded in one company crossing the one-billion-share mark for the first time.
The euphoria surrounding the stock market, however, soured a tinge as share prices of heavily traded Sumatec Resources Bhd and PDZ Holdings Bhd plunged due to profit-taking after a steep rise recently. Shares of Globaltec Formation Bhd hit 1.01 billion shares and saw its share price pare early gains.
Shares traded on the stock exchange hit a feverish 7.67 billion shares yesterday after heavy churning the day before saw the volume of shares reaching 5.11 billion.
Active trading, especially among the penny stocks, saw the 10 most-active stocks on Bursa accounting for about half the traded volume of shares.
The selldown in selected penny stocks spooked sentiment, as the number of losers outpaced gainers at a ratio of three-to-one, but that did not deter the buying of blue chips. The FTSE Bursa Malaysia KL Composite Index closed up 6.73 points to 1,878.89 yesterday.
Some 13% of the market’s total trade was contributed by Globaltec. Heavy trading in the stock sent Globaltec shares up 1.5 sen to 12 sen. The highest the stock recorded yesterday was 14 sen.
Meanwhile, red-hot penny stocks finally took a breather, led by the steep falls of Sumatec and PDZ in the afternoon trading session.
Over the past few weeks, Sumatec and PDZ had been at the centre of much trading interest among the lower liners. Penny stocks that have hogged the volume list include Luster Industries Bhd, Talam Transform Bhd, Marco Holdings Bhd and Nexgram Holdings Bhd.
Yesterday, many of these penny stocks, which had been scaling new highs, were given a reality check.
Shares in Sumatec and PDZ fell almost in synchronised fashion in the afternoon.
Sumatec retraced 17 sen or 27.87% to 44 sen on a volume of 739.24 million shares. On Monday, it closed at 61 sen, which was its highest level in 10 years.
PDZ, meanwhile, plummeted eight sen or 21.33% to 29.5 sen on a volume of 455.55 million shares.
“Well, are you surprised? We knew the euphoria had to come to an end. These stocks were rising purely on speculation and no solid backing,” remarked one observer.
The run in PDZ had been especially meteoric, as it had doubled in the last few weeks.
“Yes, we hear that a new shareholder is coming into the company, but we don’t know the plans yet. The stock is running on ecstasy,” said the observer.
In April, Pelaburan Mara Bhd had bought a 27% stake in PDZ from its major shareholder Tan Sri Robert Tan.
A research head pointed out that the fervour in the penny stocks had caught on to the retailers in the last few weeks.
“Investors need to be cautious because this is rotational. It’s a matter of time before the play goes elsewhere. The movement of the penny stocks has been getting out of hand,” said a research head.
Brokers said the active trading among the small caps meant that these stocks would eventually take a breather.
“The market is temporarily overbought, especially among the small caps. However, I foresee the rotational play continuing for the time being. There will be some temporary consolidation before the uptrend continues,” said Kenanga Research head Chan Ken Yew.
Chan felt the market would form a strong base at the 1,860-point level before encountering resistance at the 1,880-point level.
The research head agreed. He said that penny stocks aside, he did not view the local bourse as being too frothy. “There are opportunities among the bigger stocks, such as Felda Global Ventures Holdings Bhd or SapuraKencana Petroleum Bhd. These companies won’t give you excitement like what the penny stocks are giving you today, but over the long run, they will hold you in better stead,” he said.
He added that these companies had real businesses and investors could wake up not having to worry that something had gone awry.

No comments: