What do retail investors really want?

THE Singapore penny-stock crash of October last year was a painful affair that generated widespread discussion among regulators, stockbrokers and members of the public on what went wrong, how it could have been handled better and how to prevent a recurrence.

The consensus was that a huge speculative bubble had been allowed to inflate over a long period in low-priced, low-investment grade stocks with disastrous consequences once it burst. So the view which emerged was that stricter measures were needed to ensure better quality in the market and to rein in excessive speculation (and possibly manipulation).

New measures were then framed such as disclosure of short-selling positions, a minimum trading price, smaller board lots and payment of collateral for purchases. All well and good except that interest in local stocks has not returned as hoped; instead, volume has dried up and retail presence is said to have all but disappeared.