20 June 2004	Sunday	01 Jamadi-ul-Awwal 1425

KARACHI, June 19: After ruling within a single-digit for the last couple of weeks, carryover rates during the last week soared to 14.1 per cent from the previous 7.4 per cent, showing an increase of 670 basis points.

Analysts attributed the steep increase in Carryover Transactions (COT) rates to pressure on liquidity supply as leading money lenders keep to the sidelines owing to year-end considerations. Average COT rates on the Lahore Stock Exchange also rose to 12.6 per cent.

According to them COT investment during the week fell by Rs2.6bn at Rs23.2bn from the previous Rs25.8bn, a decline of 10 per cent and in market parlance, should have checked any hike in the rates.

"There were two main reasons behind the hike in COT rates", they said adding "one was reduction in prices of the leading shares and the other was the introduction of the new list of 29 shares from June 21, which will replace the existing ones".

The selling from some of the leading players caused the decline in investment on the COT market.

The new list to be effective from June 21, includes seven new scrips in addition to the existing 22 in which COT facility will be available are PICIC, PICIC Commercial Bank, Bank of Punjab, Faysal Bank, Askari Bank, BSJS Balanced Fund and Union Bank. They will replace Adamjee Insurance, Bosicor Pakistan, Dewan Motors, Fauji Cement, Japan Power, KESC, PIAC and TRG Pakistan.

"COT market is expected to remain under pressure during the coming weeks owing to levy of 10 per cent withholding tax on its income, which could also further increase the rates", analysts at a leading research house predict.