Bulls dominated the trade floor on Wednesday as shares at the Pakistan Stock Exchange (PSX) surged more than 1,300 points in intraday trade after the government clinched the staff-level agreement (SLA) with the International Monetary Fund (IMF).
The benchmark KSE-100 index climbed 1,390.46 points, or 1.19 per cent to stand at 118,023.62 from the previous close of 116,633.16 at 9:22am.
Sana Tawfik, head of research at Arif Habib Limited, stated that the “major trigger” behind the bull run was the federal government reaching a deal with the IMF for a new $1.3 billion arrangement, along with the first review of the ongoing 37-month bailout programme.
Additionally, she noted that the study conducted by Oil and Gas Development Company (OGDC) and Pakistan Petroleum Limited (PPL) over the feasibility of the Reko Diq project also contributed to the bullish momentum.
Awais Ashraf, director research at AKD Securities, said, “Investors turned bullish on reaching a staff-level agreement with the IMF for the disbursement of a $1.3bn tranche and accessing additional financing under the Resilience and Sustainability Facility (RSF).”
“Additionally, the release of the revised feasibility study for Reko Diq by OGDC and PPL has renewed interest in their respective stocks,” he said, adding that energy stocks were expected to be the focus today amid progress “clearing circular debt and the updated feasibility study of Reko Diq”.
According to an Arib Habib Limited report, OGDC and PPL had finalised the feasibility study for the Reko Diq project, which estimated a 37-year mine life.
“The companies, along with Government Holdings (Private) Limited, each hold an 8.33pc stake (25pc collectively) through Pakistan Minerals (Pvt) Ltd,” the report said.
Furthermore, it highlighted that the project would be executed in two phases, with the first one set to be completed in 2028.
Phase one, according to the report, involves $5.6bncapital outlay and $3bn “funded via limited-recourse project financing facility (negotiations ongoing), while the remainder will come from shareholder contributions”.
“Phase-II, expected to conclude by 2034, will be funded through the project’s revenue, doubling the processing capacity to 90Mtpa,” the report said, adding that over its lifespan, Reko Diq “is projected to produce 13.1mn tons of copper and 17.9mn ounces of gold”.
Mohammed Sohail, chief executive of Topline Securities, noted that the market had opened with a 1,300-point surge after the agreement with the fund.
More to follow
