Just like it's easy to push the buck to the regulator for letting stocks surge, with the occasional unusual market query.
In all fairness, the regulator had issued an alert to investors on trading in Iris five years ago, and on Harvest Court as early as last week.
Did the market players understand that an investor alert is the most serious warning before a stock is designated?
The market regulator should not be used as a punching bag for market participants' lack of foresight in scrutinising the Bursa Malaysia website.
Likewise, a handful of black sheep should not be allowed to poop the party, which never begun for the rest.
The likes of Fitters Diversified Bhd, Cuscapi Bhd and Asia Media Bhd, which are making good profits relative to their size, never really appreciated during the penny stock rally, or, should we say, the penny stock mutiny.
Should companies such as SYF Resources Bhd, which this week announced a plan to venture into the property sector and change its core business, be dismissed merely because it ran up at the wrong time?
Others, however, seem to have managed to dodge the limelight.
For example, Ramunia this week announced that it would not re-tender for an oil and gas contract in India.
Ramunia in April said it had won a US$190 million (RM602 million) contract to build up to 10 well head platforms for India's Oil and Natural Gas Corp Ltd (ONGC).
It's a crazy market indeed, with even warrants trading almost on par with the mother share.
There are several warrants that are severely out of the money and are being traded like they are the next big thing.
Indeed, market makers make life more exciting, intra-day trading more profitable, though all good things eventually must come to an end.
Like in life itself, there is no such thing as a free lunch, even in the stock market.
However, as long as research houses continue to offer minimal coverage on a wide spread of penny stocks, the general market players will be left in the dark, to evaluate what's happening in these companies.
Not everyone can understand a balance sheet or price to earnings (PE) ratio, and how reliable forward PEs are. Or why during the 1997 Asian currency crisis, PEs weren't used to value companies - rather, price to dividend yield was used.
PEs were not used as they were mostly negative due to the stock market crash of 97, thus using them at that point of time meant that most companies would have been valued as worthless.
Basically, the retail market is being run by those who are very well versed in finance, and followed by those with minimum knowledge of how finance, valuations and the balance sheet really work.
A mixture of greed and a lack of know-how means the stock market is being used like an uneven casino.
This is not limited to Malaysia. It is happening in all the major markets in the world.
Serious traders can live with that, but what they can't live with is when the stock market is treated like a cowboy town.
from btimes.com.my
No comments:
Post a Comment