Small cap rally a welcome relief

AFTER a couple of wintry years, spring has returned with a vengeance. The benchmark Straits Times Index (STI) has broken above its 2,800-point range and has climbed more than 10 per cent to over 3,100 points in a matter of months. A slight pullback saw it at 3,094.19 on Tuesday.

The recovery in value traded, now significantly above S$1 billion every day, is a welcome sight. What is more notable is how small-capitalisation stocks making up the bulk of the Singapore market have sprung to life.

Volumes are spiking. Last Friday's turnover of 3.8 billion shares was a 22-month high, not seen since April 2015. Before that, one will have to go back to the penny boom and bust of 2013 to find sustained higher volumes.