KARACHI, Aug 31: Badla or carryover trade (COT) investment at the Karachi and Lahore stock exchanges together totalled to Rs7.3 billion on Friday, reflecting a crucial new level of weak holdings, analysts said.

Average badla rates at KSE decreased slightly to 11.9 per cent on Friday, compared with the previous week end, but at the Lahore market, these had risen to an uncomfortable average of 21.3 per cent. The rise in average rates at LSE, analysts stated, was due to the investors’ preference to roll-over their positions, rather than invest their own funds. The high level of average rates was, nonetheless, cause for some concern. Around 39 million shares were financed on Friday at LSE, inclusive of 13 million shares in Hubco; 10 million shares in PTCL and 2 million shares of PSO, analysts said.

At the KSE, badla investment increased 15 per cent or by Rs800 million to Rs6.1 billion week-on-week, mainly on account of rising leveraged position in Hubco, PTCL and PSO. This leveraged position was at a four and a half month high level at KSE.

At Lahore, the COT financing had doubled in the last couple of weeks. As large number of retail investors have jumped into the fray, the LSE’s badla financing rose to Rs1.2 billion levels.

Mohammed Sohail, head of research at InvestCap, observed that the margin financing against shares with financial institutions was over and above the figure of the above badla investments.

Pakistani equities had jumped by average 10.5 per cent or 187 points in August. Analysts said that rising share turnover coupled with good corporate announcements had created a buying spree at the local bourses. “Especially after a jump of over 7 per cent in the previous two weeks, the rally has now spilled over to the retail segment where investment in Pakistan is usually made aggressively rather than rationally,” Sohail at InvestCap stated in his badla report of Saturday.