The badla rates at the share market last week moved down after money market eased off and downward slide was witnessed at the local bourses, but investment level remained unchanged on hopes that the index would soon recover. Total badla investment at KSE remained at previous Friday (October 22) level of Rs 25.5 billion. For most of the week, badla investment remained on lower side due to lower badla volumes and equity prices.
However, on the last day of the week, badla volumes increased by 4.7 percent, due to which badla investment increased by Rs 1.3 billion.
Since it was the last week for October futures contract and volumes were low, dealers expected investors to switch their leveraged position from Futures to Ready badla market. This was the main reason for badla investment to remain constant on week on week basis.
At LSE, badla investment stood at Rs 2.7 billion on Friday (October 29). This was 4 percent lower versus previous Friday badla investment Rs 2.8 billion.
Combined badla investment at both bourses, KSE and LSE, stood at Rs 28.2 billion on Friday, representing a minor decline from the previous week.
Weighted average badla rate at KSE stood at 11.6 percent on Friday. A 250 basis points decline in the KSE badla rate, compared to previous Friday's rate of 14.1 percent, was due to correction in the equity market and easing of interbank money market rates.
Badla rates in all leading scrips, excluding PSO, were in double digit range on Friday.
Weighted average badla rate at LSE declined by 420 basis points on a weekend-to-weekend basis to 11.1 percent on last Friday.
During the current week, badla investment is expected to come down, as some shifting to Futures is expected. This is on assuming that there is no significant increase in the Index. Badla rates are expected to remain within comfortable range going forward, as funds availability does not seem to be a problem.