Second-liners starting to show some life

PERHAPS the most striking feature of last week's trading was the way some second and third-liners struck out on their own, independent of how the Straits Times Index (STI) was performing at the time.

Whether the impetus came from reported earnings or hopes of future riches via merger and acquisition (M&A) deals, there are clearly pockets of value and opportunities to be had. This should offer some hope for traders in a market written off by many as being too small and therefore boring.

One possible reason why smaller stocks are forging their own path could be that traders, having neglected these counters for years and having exhausted all opportunities in blue chips for the time being, may have decided that a switch to some of the smaller stocks was called for, while simultaneously playing up the "laggard" theme that periodically springs in…