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Sri Lankan retailer investors chase ‘penny stocks’

June 09, 2010 (LBO) - Sri Lankan stocks recovered Wednesday with gains in banks pushing the market up and retail investors seen chasing midcap and 'penny stocks' with heavy speculative trading on Ceylon Leather Products, brokers said. The All Share Price Index closed at 4,464.41, up 37.14 points, while the Milanka index of more liquid stocks rose 0.53 percent (26.87 points) to close at 5,112.73.

Turnover was 1.7 billion rupees, according to stock exchange provisional figures.

"The market was mostly retail driven with high concentration on midcap stocks and penny stocks," Thakshila Hulangamuwa, vice president, business development at Asha Phillip Securities said.

"Retailers are shifting into midcap shares looking at short term trading opportunities."

Penny stocks are shares that are traded at low values.

Seylan Merchant Bank closed at 1.50 rupees, up 20 cents with over 67 million shares changing hands, brokers said.

Janashakthi Insurance closed at 15.50 rupees up 50 cents with 6.6 million shares traded, while Muller Phipps (Ceylon) closed flat at 90 cents with 1.25 million shares changing hands.

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"There was speculative buying on Ceylon Leather," Hulangamuwa said.

Ceylon Leather Products, a unit of Environmental Resources Investments (ERI), closed at 239.

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25 rupees, up 35.25 with almost 70,000 shares traded.

ERI voting shares closed at 78.00 rupees, down 25 cents.

Aitken Spence closed at 1,556.00 rupees, up 25 cents, Hayleys closed at 303.00 rupees, down 1.75, Hemas Holdings closed at 153.50 rupees, up 1.75 and John Keells Holdings closed at 196.

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00 rupees, down 1.75.

Bank stocks continued to gain, brokers said.

Commercial Bank closed at 278.00 rupees, up 6.00, Hatton National Bank closed at 293.50 rupees, up 6.50, Sampath Bank closed at 350.00 rupees, down 1.00 and Seylan Bank closed at 64.75 rupees, up 25 cents.

Foreign investors bought 123 million rupees worth of shares Wednesday, and sold 207 million, with a net outflow of 84 million rupees.

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