KARACHI, Aug 10: Thanks to improved volumes, the weighted average ‘badla’ (Carryover trade — COT) rates edged higher to 9.4 per cent on Friday, reflecting recovery from its historic low of 7.3 per cent at the previous weekend.

“With the trading volume at KSE finally improving to 294 million shares last week, all badla indicators were pushed higher from the previous week, due to rising prices and volumes,” said Khalid Iqbal Siddiqui, analyst at InvestCap.

The previous week, overnight money market rates had been higher than the COT rates, but the trend reversed in the week under review, as was anticipated due to what analysts point out was “obvious risk factor”.

Hubco managed the long-awaited rally, with its stock climbing by 95 paisa (4 per cent) in the last three trading sessions of the week, with an average daily volume of 26 million shares. “This also caused Hubco’s weak holding to inch up slightly to 42 million shares compared to 38 million shares last weekend,” analyst said. Hubco also continued to attract the highest amount of badla investment, which touched Rs1 billion on Friday, reflecting an increase of 10 per cent over the week. In line with the higher investment, the COT rate in the power utility also rose to 9.7 per cent at the weekend, from the previous Friday’s rock bottom level of 6.9 per cent.

Analysts at IP Securities dismissed the COT rate rise to “a case of weak holders disposing of their holding in blue chips and shifting their focus to the other side of the market”. They stated that the marginal increase in average investment and rates was mainly due to an increase in speculative activity in some middle weight scrips.

IP Securities observed that the average COT volume in PTCL, Hubco and PSO had showed a marginal decline, indicating that there were deliveries in the market. “Both in the case of PTCL and Hubco, investors’ sentiments improved on expectations of good full year results and solid dividends,” analysts said, adding that the genuine interest in the scrip had seen weak holders selling off their positions to genuine buyers who would want to gain the harvest of a decent yield return on both PTCL and Hubco.

Analysts at IP said that there was a marked change in punters’ interest during the week. Speculative interest in Adamjee, Sui Northern and D.G. Khan contributed to a large extent in lifting the average COT rates and investment of the market. “Adamjee came under a lot of speculative focus, which is quite evident when one looks at the average volume and COT investment in the insurance company,” analyst said. Average volume in Adamjee stood at 1.9 million shares and average investment Rs71.7 million.