Asiasons, LionGold may lead penny stock rally today

TRADERS are expecting a penny stock rally when the curtain goes up today, with Asiasons Capital and LionGold Corp leading the run.

The two counters, along with Blumont Group, will have their trading restrictions lifted by the Singapore Exchange (SGX) today.

Both Asiasons and LionGold have "some fundamentals", which could underpin their rise, according to the head of a brokerage house. "They should see accumulation on them this week," he told The Business Times.

Until SGX suspended their trading on Oct 4 because of large price falls, Asiasons, Blumont and LionGold had strong run-ups in their stock prices this year. On Oct 6, SGX declared shares of the three counters designated securities, banning investors from contra trading and short-selling them.

The regulator said last Friday it would lift the restrictions as trading in these stocks has stabilised.

For its fiscal first quarter ended June, gold miner LionGold registered a $235 million total equity attributable to shareholders. Net asset value per share stood at 25.5 cents based on 921 million shares outstanding. It had $23 million cash and equivalents and a debt gearing of 12 per cent.

The counter had traded above 70 cents since January 2011 before reaching a high of $1.755 on Aug 27 this year. The last time it traded at 15-20 cents was in June 2009. LionGold shares closed at 15.3 cents last Friday, up 0.9 cent.

Asiasons recorded a $177 million total equity attributable to shareholders for its fiscal second quarter ended June. Based on 980 million shares outstanding, net asset value per share was 18 cents. The investment firm had cash and equivalents of $13.6 million and a debt gearing of 22 per cent.

Asiasons has traded above 30 cents since May 2012 until it hit a $2.68 high on Sept 24 this year. The counter ended two cents higher at 12.8 cents last Friday.

The panic triggered by these counters has caused a sell-down in small stocks such as Albedo, CNA Group, EMS Energy and Mirach Energy as investors turned skittish.

Traders said some of the other small caps, which suffered "collateral damage" over the past week, could also regain some ground.