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Singapore shares close lower despite large gains in some penny stocks

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PENNY stocks led the local market this week, though without the entry of a significant number of retail players. The momentum of the first half tapered off in the second.

This did not come as a surprise to dealers as many have become used to watching pennies periodically burst into life over the past few years and then fail to sustain interest as liquidity dries up quickly.

As for blue chips, the easing of Greece-related fears and some stability in Hong Kong and China helped reduce the pressure on the STI, with the index closing virtually unchanged for the week. Most of the support came from banks. Friday's session however, saw the index weaken 3.72 points to 3,352.65 on turnover of 1.7 billion units worth S$959 million, the lowest unit total for the week and significantly below the 3.2 billion done on Tuesday. Excluding warrants, the advance-decline score was 183-269.

For most of the penny rally of the past fortnight, loss-making petrochemical firm CEFC International led the way, with the stock rocketing up from about S$0.03 to S$0.34 in two weeks, reminding punters of the potential that pennies offer. On Tuesday the mantle of market leader was assumed by China sports shoe sole maker Qingmei when it shot up 325 per cent, though on that day, CEFC still impressed with a 64 per cent jump.