Event
· Apart from the ongoing judicial, political and U.S relations crisis, the recent decline in the global commodities and equities has also affected Pakistan’s market. OGDC has fallen by 12.1% since touching its 16 months high of PKR170.7 last month, compared with market decline of 8.1%. Owing to the recent decline in OGDC’s stock price, recent exploratory success, and aggressive E&D program, we upgrade OGDC to ‘Outperform.
· We have rolled forward our discounting period to June-13 from June-12, and slightly adjusted our earnings to incorporate higher production from Tal. Our revised target price for OGDC comes to PKR168.5/share.
Price catalyst
· Jun-13 price target: PKR168.5/share.
· Catalyst: Success on exploration and development front (especially in Zin), increase in Qadirpur pricing in dollar terms, and resolution of circular debt.
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