limit-down

Our SBI ( Second Board Index ) came tumbling down like nobody's business, hitting the lowest level in nearly 7 years.

Investors seemed to be continue selling down small-cap companies counters due to plunging shares prices. In fact 120 stocks hit their 52-week lows. Affected companies cited 'unusual market activities' while bankers denied cutting credit lines for share margin financing (which was the reason we thought responsible for the falling index )

For the past few weeks, we have seen counters hitting limit-down.
I have came across people who liquidate unit trust & other investments comprising on returns to top up their margin financing line.
Despite being stuck in the market, some think it's a great time to enter the market now ... on the concept of buy low sell high, thus they liquidate other investments to have cashflow to gain quicker return through equities (which may work too)
Of course there are a certain level of risk we shall take to reap higher returns.

Before this, I didn't know what limit-down is till some counters started hitting limit-down starting march 2005. All I knew during then was it will result in a particular counter being suspended.
I got to know that :
For shares traded above RM 1, price is allowed to drop by 30% only in either morning or afternoon session before it's considered limit-down.
For shares traded below RM 1, only a drop of 30 cents will rendered a counter limit-down.

30% and 30 cents does means a lot, they do, they really do.
Imagine holding a few lots of 2nd board counter at rm0.45 falling to rm0.15 in just a single session.
However, we do have people who pick up stocks at rm0.15 in optimism view that price will increase in future.
We do have people who 'wait & see' (there's where they say lots of cash got stuck in market) and also people who sell to cut losses.
Well, I guess it falls back to investors' risk appetites, investment strategies & cashflow conditions as well as overall market situations.