KARACHI, Oct 29: The weighted average rate under Continuous Funding System (CFS) on the Karachi Stock Exchange last week showed a sharp rise of 3.2 per cent at 16.7 per cent as compared to 13.5 per cent a week amid brisk trading.
The increase was partly attributed to rising demand for funding in a market which performed credibly in patches, analysts at a leading research and brokerage houses said.
But on the other hand leverage future positions suffered a modest decline being the last week for the October settlements, although total leverage was higher as compared to previous week, they said.
After having fallen to a recent low of Rs23.5 billion, investment under the CFS again hit the ceiling of Rs25 billion during the week as demand for funding on selected counters showed an increase.
Investment on Lahore Stock Exchange declined from the ceiling of Rs2.3 billion at Rs2 billion during the current week. Weighted average CFS rates also fell to 16.4 per cent from the previous 21.3 per cent, dealers said.
The weighted average futures spread on the KSE again suffered a fall as leverage positions for the November contracts were financed at 21.9 per cent during the week as compared to 25.6 per cent for the October futures a week earlier, they said.
Total leverage of both the future contracts (October and November) fell to Rs14 billion from the previous week’s figure of Rs14.4 billion, while open interest in the newly-started November contracts showed an investment of Rs5.7 billion that too in a holiday-shortened week.
