When pennies seem to be real market leaders

THE saying "be thankful for small mercies" applies perfectly to the local stock market's current obsession with low-priced issues. After enduring a year of low volume, silent telephones and severely reduced commissions, remisiers are finally finding themselves gainfully occupied and breathing a little easier thanks to the small cap, penny stock rally of the past fortnight.

Many reported heightened interest among retail clients who have been attracted by the momentum in penny speculatives and the logic that these are stocks which have been sold to rock-bottom levels so that downside must be limited.

Of course, there is good reason why prices were so depressed in the first place but nothing succeeds in tempting the doubters to jump on board a rolling train like momentum. For now, fundamental considerations like earnings and cash flows have been set aside in the eagerness to participate.