UNITED Fiber System's (Unifiber's) relentless rally was turned into a sharp slump by Singapore's largest broking house, UOB Kay Hian, which tightened its controls over trading of the stock yesterday.

But while Unifiber fell 22 per cent, or 6.5 cents, to 22.5 cents on massive volume of 178 million shares following news of the curbs, other penny stocks continued to rally merrily as traders returned after the Christmas holiday.

The benchmark Straits Times Index slipped 4.57 points to 2,050.99 in a knee-jerk reaction to the bad news, but overall market sentiment stayed positive, with 222 gainers beating 161 losers.

As an indication that good times may be here again for punters trawling for penny stocks, overall market volume rose to 790.43 million shares worth $383.57 million from the 476.02 million shares worth $257.01 million done in last Friday's shortened session.

Still, there were more than a few unhappy traders on the market yesterday, as they watched with dismay the sharp correction in Unifiber's share price.

Decrying the curbs imposed by UOB Kay Hian, one dealer said: 'There is fundamentally nothing wrong with Unifiber.'

The sharp fall in Unifiber's price was exacerbated by traders short-selling the stock, after they heard about the trading curbs, he added.

There may be reasons for UOB Kay Hian's caution, given its standing as Singapore's biggest brokerage house with about 1,000 dealers and remisiers.

The stockbroking firm has taken the lead before in imposing trading curbs. Such moves included slapping restrictions on Interra Resources last year when it was the subject of massive speculative activity after it was relisted.

Including yesterday's trades, some 530 million Unifiber shares had changed hands since Monday last week, noted a remisier. 'It would pay to be prudent at least for now, since Unifiber is a concept stock,' he added.

UOB Kay Hian's trading restrictions limit each dealer or remisier's clients to purchases of only 30,000 Unifiber shares, without having to make payment upfront.

The firm has also restricted the total exposure of each remisier to Unifier to a mere $30,000, in order to curb excessive speculation on the stock.

'The restrictions have effectively pulled the plug on trading Unifiber,' said the remisier, noting that the curbs have now confined his trading in Unifiber to just 10 clients.

The controls halted a buying frenzy that had been sparked by announcements relating to Unifiber's new mill.

This did not take the wind out of the rally in other stocks, with Panpac Media edging up one cent to nine cents on volume of 24.8 million shares, and IT systems integrator DMX Technologies gaining 5.5 cents to 84 cents, on 11.1 million shares traded.

《The Straits Times》