KARACHI, April 7: The CFS rates on the Karachi Stock Exchange last week dropped to a six-month low of 11.8 per cent owing to comfortable liquidity position prevailing on the fixed income market.The previous low was hit at 11.3 per cent on Sept 14, 2006, because of lowest spread of 1.9 per cent over one-month KIBOR. The highest spread was touched at 9.02 per cent after CFS rates touched the high of 18.8 per cent.

A leading analyst Khurram Shehzad said the decline in rates generated a higher demand for more funds as was reflected by steady increase in the daily share volumes. As a result, CFS investment rose to Rs46.5 billion from the previous about Rs425 billion.

He said bulk of the CFS funding went to the credit of five top shares, leading among them being Pakistan Petroleum, Pakistan Oilfields, OGDC, National Bank and D.G. Khan Cement.

The open interest in future contracts averaged around Rs7.8 billion, finally settling at Rs8.69 billion. The ready and future spreads steadily rose to 8.16 per cent from the early week 4.19 per cent.