KARACHI, Oct 22: Stocks on Wednesday suffered widespread decline on active selling by all and sundry triggered by reports of further delay in the PSO sell-off. The KSE 100-share index was off 75 points at 3,927, eroding Rs30bn from the market capital.

There was a virtual confusion in the market after the trading resumed followed by conflicting reports about the unloading of controlling shares of PSO. Some reports indicated that sell-off may not be possible before the first quarter of the next year, while others said the privatization minister has asked the highups of the commission to fix the final bidding date.

Investors could not precisely decide which report is correct and in panic opted for liquidating long positions in it and the consequent sharp decline in its share value, which pushed it below the crucial level of Rs260.

The KSE 100-share index shed another 74.85 points or about two per cent at 3,926.71 as compared to previous 4,001.56 as all the leading base shares fell sharply lower.

Total market capitalization fell by Rs29.854bn to Rs836.603bn from the previous Rs866.457bn as heavily capitalized shares, notably PSO, Hub-Power and PTCL suffered sharp price erosions.

Trading fell to a lowest total, 139m shares for the last several months, indicating investor disinterest in the share business at least for the near-term despite board meetings of some of the leading companies are due tomorrow. PSO, DG Khan Cement, Hubco, Unilever Pakistan, Packages board meetings are due tomorrow and analysts predict higher earnings.

PSO encountered near-panic selling followed by reports of delay in its sell-off possibly by the first quarter of the new year as one of the Kuwait based short-listed bidders has reportedly requested for the postponement.

Its share value, which has been fluctuating between Rs300 on the higher side and Rs360 on the lower side under the cross-current of fixation of final bidding date and its postponement for the last six months finally bowed down to the objective scenario. It fell by Rs11.60 at Rs252.

“The confusion created by conflicting news about the sell-off of PSO worked against the underlying sentiment as leading investors kept to the sidelines awaiting further developments on the PSO front.”

Although there is no official confirmation about a possible payment default by any of the KSE members in the backdrop of a massive correction of 700 points or erosion of Rs152 billion from the market capitalization during last about one month, rumours are rife in the market about some of them.

Together with delay in the disinvestment of the PSO, the rumours of a default did not allow the market to respond to its technically-oversold position.

Banks, telecom, cement, synthetic fibre and auto sectors, notably Pakistan Oilfields, Fauji Cement, PIAC, Sui Northern Gas and DG Khan Cement were leading among the losers.

Engro Chemical also fell by one rupee at Rs80.75 as second interim dividend of 20 per cent seems to have fallen below the market expectations.

Glaxo-SKF, Bhanero Textiles, Nestle MilkPak and Siemens Pakistan were leading among the gainers, up Rs8 to Rs25 followed by Dilon, Gatron Industries, Dawood Hercules, Rafhan Maize and Zulfiqar Industries, up Rs4 to Rs5.75.

Losers were led by overvalued energy sector under the lead of Pakistan and National refineries, Pakistan Oilfields, and PSO, off Rs5.05 to Rs11.60, followed by Javed Omer, Pak-Suzuki Motors, ICI Pakistan and Treet Corporation, off Rs3.60 to Rs8.15. But largest decline was noted in Unilever Pakistan and Parke-Davis, off Rs38 and Rs44 respectively.

Trading volume fell to a low ebb at 139m shares as compared to 197m shares a day earlier as losers maintained a strong lead over the gainers at 236 to 62, with 28 shares holding on to the last levels.

FFC-Jordan Fertilizer was leading among the actives, off one rupee at Rs16.45 on 24m shares followed by PSO, off Rs11.60 at Rs252 on 17m shares, Hub-Power, lower 75 paisa at Rs35 on 15m shares, PTCL, easy 60 paisa at Rs32.90 also on 15m shares and DG Khan Cement, off Rs1.95 at Rs37.10 on 10m shares.

Other actives were led by Fauji Cement, lower 55 paisa on 8m shares, Pakistan Oilfields, off Rs9.30 on 5m shares, Sui Northern Gas lower, 80 paisa on 4m shares, ICI Pakistan, easy Rs3.60 on 4m shares and Pak PTA, lower 85 paisa also on 4m shares.

DEFAULTER COMPANIES: Barring Financial Link Modaraba, which suffered a fall of 20 paisa at Rs2.90 on 0.166m shares, all other shares showed fractional changes in the absence of active support.