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Retail speculators dominate market last week

The Colombo stock market last week saw a mix of profit taking and heavy speculative buying with both indices gaining over 2% on healthy turnover, brokers said noting that local retail investors dominated activity.

Acuity Stockbrokers said that positive earnings results from companies as well as speculative interest on selected stock enabled both indices to close the week positively.

"The All Share Price Index was up throughout the week except on Tuesday when there was a slight 0.7% dip, the Acuity Market Review said noting that the ASPI ended the week up 1.59% (58.9 points) while the MPI gained a substantial 3.02% (127.2 points).

Environment Resources Investments (ERI), previously Walker & Greig, was once again the highest contributor to the week’s turnover contributing approx. Rs.749.2 million with the counter seeing active trading throughout the week. 3.2 million ERI shares were traded during the week with price volatility evident on all five days of trading.

"The counter closed at Rs.239.25 with the share appreciating 15.6% week-on-week," the Acuity report said.

Other than ERI, C.W. Mackie and JKH were big contributors to the week’s turnover with Mackie accounting for Rs.513.5 million of the business volume and JKH for Rs.367.8 million. Brokers said that approximately 4.2 million Mackie shares and 2.1 million JKH were transacted during the week.

Mackie saw its price go up 20.9% to close the week at Rs.40.50 a share while JKH closed at Rs.170 per share closing the week up 4.6%.

The week’s turnover at Rs.6.8 billion was down 27.7% from the previous week but brokers were happy with the average daily turnover of Rs.1.7 billion – also down 27.7% from a week earlier.

"The weekly activity levels were dominated largely by retail investors," Acuity said. "Foreign investors remained net sellers for yet another week."

Foreign sales during the week at Rs.1.3 billion was ahead of Rs.0.9 billion purchases leading to a net outflow of Rs.0.4 billion with foreign participation standing at 16.2% of total activity, up from 13.4% the previous week.

Among the most traded stocks last week were Sierra Cables, Kshatriya Holdings, C.W. Mackie, Piramal Glass and Muller and Phipps.

Expressing a point of view, the Acuity report said that the overall sense on the bourse was that it will continue in green territory this week with more interim statements released and dividends announced by various companies.

Although the "earnings season" had almost come to an end, results from some of the major sectors were not yet in (notably the banking and manufacturing sectors)and the quarterly results showed that the diversified, health, hotels and plantation sectors have shown improvement quarter-on-quarter as well as year-on-year.

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