KUALA LUMPUR: As market volatility persists, penny stocks, typically those trading below 50 sen, have become a preferred entry point for retail investors seeking opportunities in the local stock market.
While some have seen substantial gains since the beginning of the year, others have suffered steep declines, highlighting the speculative nature of this segment.
An analysis of the top-performing penny stocks since the beginning of the year reveals that Jasa Kita Bhd has been the most outstanding, surging 67.65 per cent from 17 sen to 28.5 sen.
This was followed by Asia Poly Holdings Bhd, which climbed 78.57 per cent to 12.5 sen, and Velocity Capital Partner Bhd, rising 23.08 per cent to 8 sen.
Since Jan 2, 2025, Sapura Energy Bhd has experienced a notable increase, rising by 50 per cent from 3 sen to 4.5 sen.
The company recently made headlines after securing an investment of up to RM1.1 billion from Malaysia Development Holding Sdn Bhd (MDH), a special purpose vehicle under the Ministry of Finance (Incorporated).
Industry experts have stated that this investment from the finance minister is vital for the company's recovery and survival, as well as for supporting its local vendors in the oil and gas services sector.
In contrast, Salutica Bhd, an electronics component manufacturer, suffered a steep loss, falling 62.30 per cent from 61 sen to 23 sen.
The company's share price dropped on January 17, from 42 sen to 26.5 sen, triggering an unusual market activity (UMA) query from Bursa Malaysia Securities.
Salutica explained that the decline in its share price could be linked to the Kuala Lumpur High Court's ruling to dismiss the lawsuit filed by its subsidiary against Apple Malaysia Sdn Bhd.
As a result, Salutica is required to pay Apple Malaysia a counterclaim of RM1.2 million.
Other penny stocks that saw a decline include SFP Tech Holdings Bhd, which fell by 60.81 per cent from 74 sen to 29 sen, and MMIS Bhd, which experienced a 60 per cent drop.
An analyst said while the rebound of Bursa Malaysia is a positive sign for penny stocks, their outperformance compared to blue-chip stocks is expected to happen only after a prolonged market recovery, once investor confidence has been fully regained.
Tradeview Capital fund manager Neoh Jia Man said following a market crash, heightened volatility is common, and a sharp market rebound will naturally lead to fluctuations across all stocks, including penny stocks.
"Additionally, a market rebound might bring renewed speculative interest in the penny stock segment that could further amplify volatility.
"A broad market recovery will disproportionately benefit penny stocks in higher-beta sectors such as technology and oil & gas, as these industries tend to experience greater price swings in response to market sentiment," he adds.