July 15, 2007	Sunday	Jamadi-us-Sani 29, 1428

KARACHI, July 14: The CFS rates on the Karachi Stock Exchange last week dropped to 11.5 per cent from the previous 12 per cent amid low demand for funds as leading investors kept to the sidelines on external negative reasons.

Owing to Lal Masjid operation followed by jitters in stock trading, investors played safe and did not go beyond their daily funding needs amid fears of law and order situation, analysts said.

In sympathy with fall in rates, investment under CFS also showed an identical decline, they said. After having fallen to week’s low at Rs54.58 billion, it rose to Rs54.61 billion as the market was back on the rails after the end of military operation, they added.

Well over Rs24.5 billion or 45 per cent of the total CFS investment went to the credit of most liquid scrips, notably Pakistan Petroleum, OGDC, National Bank, Pakistan Oilfields and PSO, they said.

Open interest and future spreads in the forward July contracts were on the higher side at Rs10.94 billion and 6.67 per cent as compared to previous week’s Rs10.35 billion and 6.22 per cent respectively.

However, with PE at 13.2x on 2007 earnings, the market looks expensive at the current levels and prospective investors should play safe, warns a leading analyst Khurram Shehzad.