Badla investment climbs to Rs 31.5 billion

Total badla investment at both bourses (KSE and LSE) combined stood at Rs 31.5 billion on Friday, April 16, against the level of Rs 29.8 billion observed on previous Friday, April 9.
Badla investment, at one stage, touched the record high of Rs 31.65 billion on April 15. In September 2003, when equity prices crashed, total badla investment had touched the peak of Rs 28.2 billion.
However, market capitalisation at that time was Rs 1 trillion, while market capitalisation now stands around 50 percent higher and close to Rs 1.5 trillion.
Badla investment at KSE stood at Rs 27.45 billion on Friday versus Rs 26.2 billion on previous Friday.
During the course of the week, KSE badla investment touched a record high level of Rs 27.7 billion on April 15.
Even though equity prices rose on the last day of the week, badla investment declined owing to lower badla volume.
LSE badla investment was Rs 4.1 billion on last Friday, representing a jump of Rs 0.5 billion from previous Friday's level of Rs 3.6 billion.
The weighted average badla rate at KSE was 14.2 percent last Friday (April 16), which represented a rise of 140 basis points from previous Friday's (April 9) level of 12.8 percent.
The KSE badla rate touched a high of 16.3 percent during the week on April 13. However, as potential badla financiers allocated more funds to the badla market in search of the high returns being offered, these rates came down to 14.2 percent at the weekend.
The weighted average badla rate at LSE was 28.7 percent last Friday, which represents a significant rise from 19.9 percent on previous Friday.
The SECP and the Exchanges have planned out a roadmap to phase out badla by the end of 2004.
This would pave the way for implementation of margin financing going forward. The draft Margin Financing Rules 2004 were also discussed by the SECP and stock exchanges.
The phasing out of badla is likely to ease away one of the risks being faced by the market, since badla crises have been known to cause stock price crashes in local bourses in the past.
High price levels at the regular market guided the total business at the carryover market (COM) to reach a record level. After setting a new record on Thursday at Rs 27.71 billion the Carryover Value (CoV) on the weekend closed at Rs 27.45 billion.
Massive reduction was observed in the business of telecom giant PTCL. Total business in the PTCL declined by over Rs 248 million to Rs 1.79 billion from Rs 2.05 billion reported on Thursday.
Other heavyweights which followed this trend include Pakistan Oilfields, Nishat Mills and MCB.
The business in these scrips reduced by Rs 234.05 million, Rs 1470.56 million and Rs 115.39 million, respectively.
On the other hand, a notable increase was witnessed in the business of OGDC which climbed up by Rs 385.80 million to Rs 3.0 billion.
Except PTCL, where carryover charges were over 8.05 percent, majority of heavily traded scrips showed charges in the range of 13-17 percent such as OGDC 15.98 percent, Hubco 17.43 percent, SSGC 17.58 percent, PIA 13.41 percent, etc.