The badla investment at the Karachi Stock Exchange (KSE) last week recorded an increase of Rs 500 million as investors believed that after the Pakistan-India match, the index will show some recovery, boosting their capital gains.
Total badla investment at the KSE and Lahore Stock Exchange combined rose to Rs 24.3 billion last Friday (March 12). This represents a rise of Rs 1.5 billion as compared to the previous Friday's (March 5) level of Rs 22.8 billion. The rise came mainly because of an increase in badla investment level at the KSE.
Badla investment at the KSE rose to Rs 22 billion last Friday as against Rs 20.5 billion on the previous Friday.
This rise in badla investment at the KSE is really a function of a rise in badla volumes, as equity prices have remained relatively stable. Badla volume at the KSE rose from 428m shares on the previous Friday to 449 million shares last Friday. A buying spree in cement stocks saw DG Khan Cement join the list of top 5 scrips in terms of badla investment at the KSE.
Badla investment at the LSE was stable on a weekend-to-weekend basis at Rs 2.3 billion, with only a slight increase in badla volume from 66.6 million shares to 70.3 million shares.
The weighted average badla rate at the KSE last Friday (March 12) was 8.1 percent, which represents a rise of 120 basis points against the level of 6.9 percent on the previous Friday (March 5). The rise in badla rates at the KSE was seen only on the last day of the week, as the weighted average rate had remained at or below 7 percent on the previous four days.
On an average COT value term, Pakistan Oilfields headed the charts with an average COT investment of Rs 2.45 billion, which is a marginal increase of 1.9 percent than that of the last week's average COT investment of Rs 2.4 billion. As PSO became 'spot' during the last week, PTCL was spotted on the second slot with an average COT investment of Rs 2.3 billion as compared to Rs 2.2 billion, rising by 3 percent compared to a week ago.
Fresh buying took place in the cement sector as rumours of acquisition aired up for two cement companies viz. Saadi and Pakland Cement by a leading cement manufacturer, which created aggressive investment activity in the cement scrips where genuine buying was seen in Maple Leaf Cement.
The rise in badla rates on the last day can be attributed to a sharp rise in interbank money market rates, where overnight repo rates surged to as high as 7 percent.
The weighted average badla rate at the LSE was also higher on a weekend-to-weekend basis as it rose to 9.2 percent on last Friday versus 7.2 percent on the previous Friday.
Traders expect badla rates to remain stable going forward. There is expected to be lesser activity in the stock market as well, as cricket fever engulfs the country and corporate results season is over for now. Also, money market rates are expected to return to lower levels, after being higher due to last-day averaging concerns.