Investors enter buying frenzy
Angus Rigby, Chief Executive Officer, TD Waterhouse comments: "As Britain finally emerges from the recession following economic growth recorded at 0.1% for the last quarter of 2009, it seems to have spurred a spending spree among retail investors. This week marked a 61% increase in overall top ten trades, with an impressive ratio of almost three buys for every sell reflecting a corresponding surge in bank buys.
"Banking trades accounted for almost two thirds (63%) of the overall top ten trades, with bank buys 194% ahead of respective sells this week. Retail traders appeared to be looking to take advantage of the average 6.08% fall in banking sector shares last week following Obama's proposals against proprietary trading. The new proposals aim to sharply limit the size and activities of banks operating in the US.
"Barclays was the most popular trade - accounting for a quarter (25%) of the overall top ten after its share price fell 1.87% to 5.30p over the last seven days. Barclays president, Bob Diamond became one of the first to voice his opposition to Obama's plans in Davos this week. It will be interesting to see how our customers trade next week after the 2,500 leaders from business, government and civil society return from this year's World Economic Forum in Davos.
"Mining sector buys also remain a popular strategy this week, with Rio Tinto climbing to sixth place in the buys table. The mining industry's second largest iron ore producer is subject to an investigation by the European competition regulator regarding its joint venture with rival BHP Billiton - the third largest ore producer in the world. The deal, which is estimated to be worth around £72 billion, has sparked fears that it will create a company too dominant in the worldwide market for seaborne iron ore.
"Finally, United Utilities entered the top ten sells at sixth place this week after Ofwat set strict new price control rules, which may result in the loss of thousands of jobs in Britain's water companies. Ofwat announced that the average annual bills will have to fall by 1% by 2015. As one of the largest water companies in the industry, United Utilities could stand to lose 500 positions over the next few months, which could result in a cut to its dividend."