While blue chips have taken a battering from the flight of foreign funds out of Asia, the biggest hits on the stock front have been felt by China plays and penny stocks.

The bloodshed has been eye-watering. The UOB Catalist Index, which tracks penny stocks listed on the second board, has plunged 52.8 per cent from its peak of 302.64 on July 24 last year to 142.96 yesterday.

China stocks listed on the Singapore Exchange (SGX) fared even worse, with the FTSE ST China Index down 59 per cent to 432.69 yesterday from its record high of 1,054.82 on Oct 1 last year.

By comparison, the benchmark Straits Times Index has lost a mere 22.7 per cent to 2,962.16 yesterday from its Oct 11 record of 3,831.19.

But the best measure of the anxiety and growing apathy among retail investors is the huge drop in activity from July 18 last year, when volumes hit a record 9.22 billion shares worth $4.4 billion.

The United States sub- prime crisis and the run of bank write-downs and other financial catastrophes that flowed from it have played havoc with investors' appetite for risk.

Average daily volume in the current quarter so far is 1.46 billion shares worth $1.67 billion. This is less than half of the 3.23 billion shares worth $2.33 billion that changed hands daily over the same quarter last year, when foreign funds and retail investors were pouring billions into the market.

'The fall in daily volumes in each quarter is an indicator of bearish market sentiment,' said remisier Alan Goh.

Yesterday's volume was barely above the one-billion share mark.

Only the die-hard day traders have stayed, trying to make a profit on the intra-day price movements of heavyweights such as DBS Group Holdings and Keppel Corp.

'The new clients who came into the market last year, thinking that trading was an easy way to make money, have almost all cleared out after losing a pile,' added Mr Goh.

SGX, which relies on clearing trades for the much of its income, is feeling the pain of falling volumes.

Its share price had climbed from $5.95 on Jan 3 last year to a record $16.40 on Oct 8, before falling to a low of $6.40 on March 20.

Stock markets across the globe rebounded after the US central bank orchestrated a bailout of investment bank Bear Stearns and SGX benefited. It climbed back to $9.46 on May 5 before retreating on subsequent jitters. It lost 10 cents to $7.09 yesterday.

As market sentiment soured, investors have been forced to hold shares for longer periods. Valuations have become cheaper, as the bearish market conditions weed out investors who are forced to sell at a loss because they could not afford to hang on.

'Stock holding periods are synonymous with booms... but holding periods are now lengthening. This is indicative of increasing disinterest by the investing public,' said Citigroup strategist Markus Rosgen on Monday.

The good thing about the Singapore market is that while holding periods have increased, 'it remains well away from levels which signal disinterest', he said.

Holding periods hit a peak in 2003, the height of the Sars crisis. Then investors clung to shares for an average of 2,000 days - more than five years.

Since then the holding period plunged to 500 days last year before increasing slightly to about 550 now.

But Mr Rosgen believed that when markets eventually recover and volumes improve, a fresh bull run will ensue and 'happy days will be with us for a while'.

engyeow@sph.com.sg