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Singapore: Blue chips take over from pennies
SINCE the start of April, the statistic that has been arguably the most relevant in describing events in the local stock market is average value per unit traded. This figure sank to below S$0.40 in the middle of the month in line with a surge in punting of low-priced stocks.
That was most probably thanks to proprietary desks looking to capitalise on any positive spillover feelings from a massive rally in Hong Kong and to a great extent, they succeeded.
On Thursday, however, when the Straits Times Index enjoyed a late push that took it from an 11 points loss to a 0.24 of a point gain at 3,487.39, volume traded was 1.4 billion units worth S$1.5 billion which meant average value per unit traded was S$1.07 - the highest for the month, suggesting that penny fever has rapidly subsided.
A second interesting statistic to consider is volume done in the 30 STI components and its proportion to total volume. For most of this month, business in the 30 was around 20-30 per cent of total volume. On Thursday, dollar turnover in the 30 was S$604 million, roughly 40 per cent of the total.
A third interesting factor to consider is that five STI components made it to the list of 20 most active stocks, something which would have been unthinkable a month ago. These were Noble, Thai Beverage, Singtel, Genting Singapore and Golden Agri Resources.
This doesn't mean that penny activity is non-existent; rather, there was still evidence of rotational playing of low-priced issues.
In this holiday-shortened week, the STI dropped 26 points or 0.7 per cent.