KARACHI, Sept 7: Badla or carryover trade (COT) rates at Karachi Stock Exchange weakened slightly to 11.1 per cent at the weekend, from 11.9 per cent the previous on Friday, but at the Lahore bourse, these climbed higher to 32 per cent, from 21.3 per cent week-on-week.

InvestCap in its badla report stated that liquidity crunch at LSE had resulted in higher annualized badla rates. “Some of the leading stocks at LSE badla market, like Hubco and D.G. Khan Cement witnessed rates of 35 per cent and 43 per cent, respectively, mainly on account of rising badla volumes with limited availability of share financing”, analysts said.

Leveraged share positions, as indicated by badla investment, declined by Rs400 million on Friday to Rs5.69 billion at the KSE. It was said to be due mainly to offloading of Hubco’s shares by weak holders during the week, after the company announced slightly-lower-than-expected final dividend. Badla financiers provided Rs1.3 billion to finance Hubco’s shares on Friday, compared to Rs1.8 billion a week ago.

Badla investment in PSO — the oil marketing company that had sparked the recent rally at the KSE — was the highest amounting to Rs1.9 billion, accounting for a third of total share financing. Leveraged share financing in PSO at Lahore amounted to Rs354 million, second highest after Hubco which saw badla investment at Rs376 million.

Brokerage house, IP Securities observed in its COT market report that the badla market had remained stable during the week with no major fluctuations. According to IP analysts, average COT investment registered marginal decline of 2.9 per cent during the week and stood at Rs5.2 billion. However, average COT rates were 11.7 per cent, which reflected 4.6 per cent improvement over the earlier week’s rates of 11.2 per cent. IP Analysts expect average COT rate to climb to its resistance level of 13 per cent in the coming week.