Two “disadvantages” of buying stocks that are not very popular are that…

They are virtually illiquid (very low trading volume) The spread (bid/ask) price of the stock is immensely huge.

Unlike the famous stocks that people buy in the STI (e.g. Singtel), where the spread can be just 1 cent, stocks like Keong Hong and Tat Seng Packaging can drop a few percentage points in 1 day of trading.

Needless to say, the smaller (yet, maybe not cheaper) the price of the stock, each spread will also affect the price more. A mere 0.5 cent movement in the current price of Indofood Agri at 24.5 cents can cause a 2% change in your initial investment. Imagine that!

In late May, there was news that showed that Keong Hong was fined for offering poor living conditions to their employees. This caused her price to drop 11% when the stock market opened …

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