October 22, 2006	Sunday	Ramazan 28, 1427

KARACHI, Oct 21: CFS financing on the Karachi Stock Exchange last week showed an increase of 10 per cent at Rs24.6 billion as compared to the previous Rs22.2 billion owing to continued bull-run followed by price flare-up in selected shares.

Analysts said the CFS limit under the new formula was expected to be increased to Rs30 billion from the existing Rs25 in the first week of November and would be progressively raised to Rs55 billion by the end of the current year.

The figure of Rs55 was expected to fully meet the financing needs of investors in a bull market, and financing rates might also rise in sympathy, they said.

They said as the demand for funds in a rising market remained on the higher side throughout the pre-Eid holiday trading week, cost of borrowing also rose by 172 basis points at 16.1 per cent.

On the forward counter, open interest on October contracts fell to Rs9.7 billion from the previous Rs9.8 billion. As a result, borrowing cost also declined to 7.3 per cent from the previous 8.2 per cent.