Badla investment up 5.7 percent

Rising equity prices and cheap availability of funds helped investors to take positions, which resulted in badla investment hovering around Rs 30 billion for most of the last week. The carryover transaction (COT) at the local bourses remained elevated where badla investment at the Karachi Stock Exchange (KSE) touched its ever-high level of Rs 30.7 billion on Thursday.
The average COT Investment during the current week stood at Rs 30 billion, a 5.7 percent up from its previous week level of Rs 28.5 billion whereas the average COT volume of the market remained buoyant, showing the increased interest of the investors towards the badla trade in the wake of a better market outlook.
Screening out the top three badla shares, PSO remained the torch-bearer which an average COT investment of Rs 4.1 billion where OGDC and Pak Oilfields were next to follow with an average COT investment of Rs 2.8 billion and Rs 2.7 billion, respectively.
The COT in Nishat Mills Ltd remained high due to increased institutional buying followed by weak-holding where the stock surged by Rs 12.40 amid two upward caps during the week to close at Rs 66.30 per share at the ready counter.
The speculative interest in DG Khan Cement and Engro Chemicals was also witnessed where heavy volumes generated in both scrips. However, financiers seemed reluctant to go for the said scrip enabling the average COT rate of DG Khan Cement and Engro Chemicals to move up to 10.7 percent and 10.4 percent, respectively.
For the following week, analysts are still hoping for the market to remain positive in the midst of correction. As far as the COT market is concerned, the average COT rate to remain around its current levels.
At the Lahore Stock Exchange (LSE), the badla investment increased by 5.7 percent to Rs 3.1 billion during the week. The combined badla investment at two bourses was Rs 1.7 billion or 5.4 percent higher at Rs 32.9 billion on Friday.
The weighted average badla rate at the KSE finished 30 basis points higher at 9.5 percent on Friday from previous Friday rate of 9.2 percent. The badla rate was in single digit range despite record level of badla investment during the week.
Traders and dealers believed this was due to lower overnight money market rates because of a highly liquid interbank money market. The weighted average badla rate at the LSE increased by 140 basis points to 13.6 percent last Friday.