PENNY STOCK RETURNS IN THE MALAYSIAN STOCK MARKET: COGNITIVE HEURISTIC PERSPECTIVES
DOI:
https://doi.org/10.18623/rvd.v23.4301Palabras clave:
Penny Stock Returns, Cognitive Heuristics, Malaysian Stock MarketResumen
In recent years, the prevalence of penny stock fever has risen in the Malaysian stock market, sparking interest among individual investors due to the potential for higher returns. Commonly, individual investors overlook fundamental and technical analysis when investing in penny stocks because of the nature of these stocks. Thus, this study is crucial for examining penny stock returns in the Malaysian stock market from a cognitive heuristic perspective. Specifically, this study employs monthly panel data of 26 penny property firms from 1st January 2019 to 31st May 2025. The dependent variable is penny stock returns in the Malaysian stock market, and the main independent variables are overconfidence, anchoring, and herding. Furthermore, this study employs three static panel data methods, namely Pooled Ordinary Least Squares (Pooled OLS), Fixed Effects Model (FEM), and Random Effects Model (REM). It examined the specific effects of Pooled OLS, REM, and FEM using the Poolability test, the Breusch-Pagan (Lagrange Multiplier) Test, and the Hausman Test. Subsequently, three diagnostic tests are conducted: descriptive analysis, the serial correlation test, and the heteroskedasticity test. Based on these analyses, Malaysian investors exhibit irrationality in their investment decision-making, driven by overconfidence, anchoring, and herding.
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