KARACHI, Sept 10: The investment under the Continuous Funding System (CFS) on the Karachi Stock Exchange throughout the last week stayed on the finish line of Rs25 billion as investors opted for higher borrowing to finance the rising share values, analysts said.
Over the last week, the KSE 100-share index added another 100 points to its previous total, which fuelled price flare-up on selected counters, which in turn increased the financing needs of some leading borrowers.
The interesting features was that it briefly touched the week’s peak level of Rs25.2 billion beyond the CFS limit, indicating that the limit could be broken depending on the financing needs of some big borrowers, they said.
But on the other hand the CFS rates fluctuated between 15.2 to 17.5 per cent as on some occasions CFS financers outnumbered the borrowers but finally settled around 16.2 per cent.
CFS rates on the Lahore Stock Exchange remained on the higher side and rose to 18 per cent from the previous 17 per cent, touching the highest at 18.9 per cent.
“Will the increase in open interest in stock futures could line up needed liquidity to the expanded operations beyond Rs25 billion is yet to be seen”, a leading analyst at a research house observed.
The open interest in stock futures has, over the last week, progressively risen to Rs8.9 billion from the previous Rs7.3 billion on each day, he says, adding which could give new meaning to the capped CFS of Rs25 billion in the coming weeks.
