The investment in badla market on last session of the week rose to Rs 27.7 billion and the higher trend indicated that most of the investors had taken longer position anticipating that the market would perform on expected announcement from the corporate sector.
Badla investment on Friday increased to Rs 27.7 billion, increasing by Rs 2.1 billion or 8.1 percent in badla investment during the week. Badla investment of Rs 28.2 billion on Wednesday was third highest in KSE history.
Analyst from Investcapital Securities said he believed that the increase in badla investment, with low volumes and stable equity prices, meant that outside market badla was coming into the formal system.
Hence, there might have been little or no change in overall leveraged positions during the week. This was why badla rates remained range-bound during the week.
Badla investment at LSE on Friday stood at Rs 3.7 billion, which is a rise of Rs 0.3 billion as compared to the previous Friday, July 9.
Combined badla investment on the two bourses increased by Rs 2.3 billion or 8.1 percent to Rs 31.4 billion on Friday.
The weighted average badla rate at KSE last Friday was 11.8 percent, which shows a minor increase of 60 bps compared to previous Friday's badla rate. The weighted average badla rate at LSE on the last Friday was 15 percent--an increase of 270 basis points compared to previous Friday.
On Friday, badla rates at KSE in leading stocks like PSO, OGDC, DG Khan, Pakistan Oilfields, and NBP were 10.2 percent, 10.9 percent, 13.7 percent, 9.5 percent, and 10.2 percent, respectively.
With declining share prices, the increase in badla volumes and investment was a clear indication that outside market badla was entering the official badla market. This was also endorsed by badla rates that did not show any panic-like situation.
In the coming week, badla rates are expected to remain stable due to liquid money market. Though PIB yields are on the increase, but this would not affect very short duration badla market.
OGDC could not maintain its top slot on the badla counter this week as PSO witnessed huge badla investment as its FY04 result is on the cards. Average COT investment in PSO was reported at Rs 3.87 billion.
OGDC held second place by reporting an average COT investment of Rs 3.2 billion with 47.6 million shares being traded on an average basis. DG Khan Cement retained its third position for the third consecutive week with an average volume of 45.4 million shares.
Average COT investment and average COT rate for the scrip stood at Rs 2.7 billion and 13.8 percent respectively.
For the coming week, dealers and analysts expect the market to remain weak, and the COT rates to remain marginally below the current level. "However, we expect it to maintain its double digit figure."
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