April 06, 2008	Sunday	Rabi-ul-Awwal 28, 1429

KARACHI, April 5: The CFS rates on the Karachi Stock Exchange last week showed a fractional fall of 20 basis points at 11.90pc as a section of investors played safe apparently ahead of the introduction of Mk-II from April 7, analyst Saad Arshad Raja said.

The Mk-II will end the current CFS (continuous funding system) ceiling of Rs55 billion ensuring massive liquidity up to Rs85 billion without any cash margin, he said, adding “if judiciously injected in the share business it will not only change current trading pattern but will also boost daily volumes,” he said.

“It will give a major boost to the share market, already under squeeze both from the foreign and local investors, notably financial institutions,” he added.

The next week could well prove a crucial takeoff point as it will demonstrate how the investors, with huge cash at their disposal, will operate under the Mk-II, some others said.

A modest increase of Rs0.14bn in the CFS investment at Rs54.53bn reflects that investors will not go for it immediately and will watch the positive developments on the share market during the next couple of sessions, they added.

A major chunk of the investment went to the credit of top five companies. Open interest on the forward counter showed a sharp rise of 27pc in the ruling April future settlements at Rs16.35 billion, while future spreads rose by 222 basis points at 9.27 per cent.