KARACHI, Jan 1: Carryover rates on the Karachi Stock Exchange during the last week soared to a year's peak level of 18 per cent before easing slightly at the fag-end of the week as inflow of funds from the money market showed a modest increase.

Analysts attributed the initial rise in rates to increased demand for funds in a bull market and soaring share values, which banks and financial institutions failed to meet owing to year-end closing. The closing rate was around 17.5 per cent.

However, they predict supply position is expected to be normal as the banks will resume new year lending, which in turn will sharply lower the rates. Badla rates at the Lahore Stock Exchange also fell about two per cent at 17.8 per cent.

"After having set a new record at Rs37.2 billion, investment on the carryover market stood higher at Rs35.8bn", they said adding the "net increase being 3.4 per cent or Rs1.17bn over the previous figure".

Both higher equity values amid unprecedented price flare-up and massive volumes in some of the leading shares, notably PTCL, OGDC and Fauji Fertilizer Bin Qasim pushed the investment figure to a new peak level, some others said.

"Sanity is expected to return to carryover market with the start of the new year trading by Monday as banks are expected to resume normal lending operations by injecting idle funds into the share business", money market sources hoped.