The Pakistan Stock Exchange (PSX) witnessed a significant surge on Wednesday, with the benchmark KSE-100 index climbing over 1,300 points in intraday trading. This bullish momentum follows the government’s successful staff-level agreement (SLA) with the International Monetary Fund (IMF) for a $1.3 billion arrangement, supplementing the ongoing 37-month bailout program.
Sana Tawfik, head of research at Arif Habib Limited, identified the IMF agreement as the primary catalyst for this uptick. Additionally, the completion of a feasibility study by Oil and Gas Development Company (OGDC) and Pakistan Petroleum Limited (PPL) for the Reko Diq project contributed to the positive market sentiment.
The feasibility study revealed that the Reko Diq project, located in Balochistan, has an estimated mine life of 37 years. It is projected to produce approximately 13.1 million tons of copper and 17.9 million ounces of gold over its lifespan. The study also confirmed a lucrative 25% rate of return on investment. Notably, the project aims to operate entirely on solar energy, positioning it as a pioneering green initiative in the mining sector.
The Reko Diq project is planned to be executed in two phases. The first phase, expected to be completed by 2028, involves a capital outlay of $5.6 billion. Funding for this phase includes $3 billion through limited-recourse project financing, with the remainder sourced from shareholder contributions. The second phase, anticipated to conclude by 2034, will be financed through the project’s revenue, aiming to double the processing capacity to 90 million tons per annum.
This surge in the PSX reflects growing investor confidence, spurred by the IMF agreement and the promising prospects of the Reko Diq project.
