Slow price movement at the stock market arrested the upward movement in badla market where rates entered single-digit zone during last week.
With the range-bound stock market, annualised badla rates followed a declining path. However, CoT volumes depicted some increase over the previous week.
At KSE, the weighted average badla rates reached 7.5 percent, a decline of 2.9 percent over previous week against 10.4 percent on February 13. The annualised badla rate reached on the weekend was the lowest since November 2003.
The weighted average badla rates crossed double digit only once - on Wednesday. Liquid interbank money market helped the badla market.
At LSE, weighted average badla rates reached 11.2 percent on weekend - a decline of 2.7 percent over rates on previous weekend.
Total badla investment at KSE reached Rs 21.2 billion on Friday, February 20 - an increase of Rs 0.4 billion - compared to Rs 20.8 billion on previous weekend.
During the week, badla investment reached Rs22 billion mark on Wednesday, which was the highest amount since September 2003, when index was returning from the 4604 level.
At LSE, total badla investment reached Rs 2.7 billion on Friday, around Rs 0.1billion less than last Friday's investment of Rs 2.8 billion.
An interesting observation last week was the jump in badla volumes. KSE badla volume surged by 24 million shares to reach 435 million shares on Friday, mainly contributed by PTCL.
Increase in badla in PTCL may be a result of rising speculation of its half-yearly accounts expected to be released on February 26, 2004.
No major change is expected in badla market. Both rates and total investment in the badla market are expected to remain in the same range as witnessed during the outgoing week, unless it sees a major increase or decrease in equity values.
Liquid interbank market will continue to support weak holdings in the local bourses.
The overnight rates during the early part of the week moved between 6.50 percent and 7.50 percent. But State Bank of Pakistan through the sale of treasury bills having maturing of three-month and one-year lifted nearly Rs 38 billion from the interbank market, easing overnight rate, which moved to 0.20 percent.