SMALL caps are the latest glamour stocks, but some analysts warn they might not be the wisest choice for the small punter.
Reports have appeared around the globe recently suggesting that fast, flexible small-capitalisation stocks are poised to outperform their stodgy blue-chip brethren - particularly in this region, where economies are seen picking up steam in coming months.
'Smaller Asian companies are a more attractive investment than blue chips at present,' Guinness Flight Asia's investment director, Nerissa Lee, told an audience of fund managers, financial advisers and private investors in San Francisco last month.
Small caps were cheaply priced and promised good performance, she said.
On a weighted average basis, smaller companies in Hong Kong, Indonesia, Malaysia, the Philippines, Singapore and Thailand had a price-earnings ratio of 15.3 in 1996 compared with 17.7 for larger companies.
Looking forward, smaller companies' earnings per share (EPS) were expected to grow by 27 per cent in 1997 compared with only 16 per cent for larger companies, she said.