KARACHI, June 20: The news of sell-off of the controlling shares of PTCL to a UAE company at $1.96 per share was well-received in the market as it reflects official thinking on its privatization programme irrespective of the allied problems. Stocks on Monday rose appreciably under the lead of PTCL and oil giants but buying euphoria associated with such big news was lacking for obvious reasons.

Despite a turmoil and fears of a big showdown by the striking union workers smooth sell-off allayed fears but analysts cautioned investors to play safe until some of the prevailing irritants on the issue are removed.

The KSE 100-share index rose by 264.31 points or 3.57pc at 7,663.04 as compared to 7,398.73 at the last weekend as all leading base shares recovered from the recent lows under the lead of PTCL, PSO, OGDC and Pakistan Petroleum. Circuit-breakers have to be applied in most of them to forestall further speculative rise in their share values.

The market capital also rose to Rs2,123.894bn from the previous Rs2,057.163bn, up by Rs66.731bn as all the heavily capitalized shares, notably OGDC, PPL, and PTCL rose sharply higher.

The breach of three consecutive psychological barriers (7,400, 7,500 and 7,600) in a single session is significant but incidentally, it was not matched by the price flare-up, which is an instant outcome of such bullish news, brokers said adding “it reflects some reservations on the part of big players”.

A UAE-based leading telecom company, Etisalat, offered highest price of $1.96 per share as compared to other two bidders and won a stake of 26 per cent or controlling shares of the PTCL. The total sale proceeds amount to $2.6 billion, which the UAE company has to pay to the Privatization Commission in instalment.

PTCL share did respond favourably to the news but not on the scale widely speculated by some of the analysts during the post-sell-off trading. It rose by Rs3.35 at Rs70.65, being the highest for the day but the talk of massive rise proved incorrect.

“At $1.96 per share, the local price of the PTCL share should come to Rs117 per share based on the exchange rate”, analysts said adding “but we don’t think that level could be touched owing to typical pre-sell-off tussle with the union”.

Earlier, this year, however, its share value touched the high market of Rs100 per share of Rs10 and premium of Rs13 on reports of its privatization.

Moreover investors were also cautious and did not go all-out as some factions of the labour union were still at strike and how they decide their future course of action would have bearing on its share values, they said.

“The KESC episode still haunts investors as some of them suffered heavy losses who have taken big stake in it after the Saudi highest bidder backed out and did not honour their payment obligations”, brokers said.

But the PTCL sell-off reflects official resolve to go along with its phased out disinvestment programme of state-owned entities irrespective of the employees resistance. Another mega unit, PSO, may follow it.

Leading oil shares came in for active short-covering and evoked strong support on the other counters, National Refinery and PSO being top scorer, up by Rs16.10 and Rs18.75 respectively, OGDC, Mari Gas, Shell Pakistan, Pakistan Petroleum, and Pakistan Oilfields, up by Rs5.15 to Rs13.15.

National Bank, Javed Omer, Millat Tractors, Dawood Hercules and Glaxo-SKF also rose by Rs4.40 to Rs7.50.

Pakistan Services and Rafhan Maize were leading among the losers, off Rs8.50 and Rs34.75 followed by Clover Pakistan, Zulfiqar Industries, Security Papers, Exide Pakistan, Pakistan Engineering, Ahmed Hassan Textiles and EFU Life, off Rs2 to Rs5.

Trading volume showed a modest rise at 284m shares from the previous 260m as investors generally played safe but gainers maintained a strong lead over the losers at 202 to 113, with 28 shares holding on to the last

levels.

PTCL topped the list of most actives, up by Rs3.35 at Rs70.65 on 83m shares followed by OGDC, higher by Rs5.15 at Rs108.80 on 45m shares, National Bank, up by Rs5.05 at Rs106.15 on 43m shares, PSO, higher by Rs18.75 at Rs394.35 on 17m shares, Pakistan Petroleum, up by Rs10.65 at Rs224.15 on 13m shares, Pakistan Oilfields, firm by Rs13.15 at Rs276.95 on 12m shares and Bank of Punjab, up by Rs2.25 at Rs80.25 on 8m shares.

Other actives included D.G.Khan Cement, higher by Rs1.75 on 8m shares, Sui Southern Gas, higher by Rs1.15 also on 8m shares and Pak PTA, firm by 30 paisa on 7m shares.

FORWARD COUNTER: PTCL also led the list of actives, on this counter, higher by Rs3.39 at Rs71.34 on 22m shares followed by OGDC, up by Rs5.19 on 17m shares. Closing at odd rates indicates to forestall further price movements.

Pakistan Petroleum followed them, higher by Rs10.70 at Rs224.70 on 13m shares, PSO, up by Rs8.91 at Rs397.16 on 11m shares and National Bank, up by Rs4.75 at Rs106.70 on 7m shares. Others also rose modestly on light trading.

The notable feature was that trading also resumed in the forward July settlements side by side the maturing June contract, which also rose in line with their June deliveries.

DEFAULTER COS: Trading on this counter remained slow, although price changes were on the higher side on most of the counters, barring Dewan Autos and Chenab Textiles, which fell by Re1 and Rs1.45 at Rs11 and Rs27.55 respectively.