Penny stocks

Penny stocks: continued to dominate trading on Friday, but analysts say their time is almost up. Small, cheap stocks, some costing as little as one or two cents apiece, have been driving up market volumes to astonishing heights in recent weeks. NRA noted that in the past, such rallies had been cut short when trading reached such a frenzied level that brokerage houses got spooked. In 2009, for example, at the height of a penny-stock rally, UOBK told its customers that they could no longer use their Internet trading accounts to buy or sell shares in five small chip firms, including Jade Tech, Transcu and Ban Joo. Trading in all penny stocks died down soon after. History could be repeating itself soon. UOBK on Thursday listed 13 penny stocks that its customers are no longer allowed to trade online, including Artivision, Digiland and JEL. OCBC Securities has banned Yoma Strategic and JEL from online trades. Nobody seems to know who is trading these 'ultra pennies'. Remisiers and analysts hint that it could be the work of 'trading syndicates' - groups of full-time stock market traders who work together to amass large amounts of certain stocks in order to push up their values and then profit by selling them off. Veteran stock market observers term it 'pumping and dumping'. "We have seen this countless times before," said a senior dealer. "Penny stock fever takes grip when cheap stocks start to move, the action gets overheated and then it all collapses." Another said: "Everyone knows that there's nothing behind most of the moves, no news, no fundamentals. But as long as everyone knows the score, then the playing field is level."