Should forex traders be worried? To be more specific, should Singaporean traders be careful? In case you haven’t heard, there has been a recent development of the penny stock crash in Singapore. This devastating event has prompted the Monetary Authority of Singapore (MAS) to step forward and announced to the public that a review was currently taking place. This suspicious event has raised a few eyebrows. There were talks swirling around the Singapore stock exchange whether it missed the signs and was too stolid to take the necessary steps involved to tackle the problem. Were they too late?
In the Singapore stock exchange market, our country is generally quick to respond to slight changes when it concerns our government, effectual regulations, and low levels of crime rates. All these points are worth taking a look at as they play a major part in making our country one of Asia’s major financial centres. At this point of time, there is no evidence of fraud. This is in the cases of Blumont Group Ltd, LionGold Corp, and Asiasons Capital Ltd. One of the companies, LionGold, was reported that it trusted MAS and SGX (Singapore Exchange) to carry out a systematic inquiry to discover and examine the matter. SGX
Hold on. What is Penny Stock?
Investopedia explains that penny stock refers to a stock that trades at a fairly low price and market capitalisation, under normal conditions outside of the major market exchange. When you look at it this way, you will begin to realise that there are many different types of terms in the Singapore stock exchange market. Investopedia further indicates that penny stocks have a lack of liquidity, large bid-ask spreads, small capitalisation and limited following and disclosure. Because of this phenomenon, penny stocks are widely considered to be highly speculative and high risk. It takes only one mistake to wipe out all your earnings. Which is to say that in the Singapore stock exchange market, there aren’t many traders interested in getting involved with penny stocks.
Penny stocks are the opposite of blue chips, such as SIA, DBS, UOB, OCBC, SingTel and Keppel Corp. As taken from Investopedia, blue chips companies are known to weather downturns and operate profitably in the face of adverse economic conditions, which in turn helps to contribute to their long record of stable and reliable growth. Newbie forex traders should recognise that blue chips sell high-quality, widely accepted products and services.