Bourse extends fall on lack of liquidity, margin calls

Thursday, 18 October 2012 00:39 - - {{hitsCtrl.values.hits}}

Reuters: Stocks fell for a third day on Wednesday to a more than five-week low in thin trade as lack of liquidity for retail investors dented market activity amid margin calls to settle credit transactions.

The Colombo Stock Exchange’s main index fell 0.39% or 21.73 points, to 5,586.40, its lowest level since 10 September.

“Retail investors, who dominate trading, are not active due to lack of cash. Since the market has come down, there are also broker margin calls, compelling retail investors to sell their shares,” a stockbroker said on condition of anonymity.

The market saw a net foreign inflow of Rs. 7.5 million, extending the net offshore inflow to Rs. 33.3 billion so far this year.

Turnover was Rs. 372.1 million ($ 2.89 million), less than half of this year’s daily average of Rs. 947 million.

The rupee closed marginally weaker at 128.85/129.00 to the dollar compared with Tuesday’s close of 128.75/80 on importer dollar demand, dealers said.