Singapore Hot Stocks - Rigbuilders up on strong order outlook

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Singapore Hot Stocks - Rigbuilders up on strong order outlook

SINGAPORE | Mon Jan 9, 2012 9:16pm EST

Jan 10 (Reuters) - Shares of Singapore rig builders Keppel Corp Ltd and Sembcorp Marine Ltd rose on Tuesday as analysts said the two companies are well positioned to capture more orders.

At 0207 GMT, shares of Keppel Corp and Sembcorp Marine were up 2.2 percent and 3.3 percent, respectively, outperforming the broader Straits Times Index which was 0.4 percent higher.

DMG & Partners, which hosted Sembcorp Marine's chief financial officer Tan Cheng Tat at a recent event, said management was confident of winning more than S$5 billion ($3.9 billion) of new orders in 2012, higher than S$3.7 billion in 2011.

"Management was particularly upbeat on new order prospects and believes Sembcorp Marine will see higher fresh order wins in 2012," DMG said, adding that the company is committed to building a strong presence in Brazil.

DMG maintained its buy rating and a target price of S$5.25 on Sembcorp Marine stock.

Keppel Corp shares were lifted on Tuesday by its announcement that it had won a contract worth around $150 million from Diamond Offshore Drilling Inc to construct and upgrade a deepwater semi-submersible rig.

DBS Vickers said there is significant pent-up demand for semisubmersible rigs on the back of strengthening fleet utilization rates, a shrinking orderbook due to a lack of new orders over the past three years and a highly aged fleet.

DBS's order wins assumption for Keppel Corp's 2012 and 2013 fiscal years are S$6 billion and S$5 billion, respectively.

($1 = 1.2974 Singapore dollars) (Reporting by Eveline Danubrata; Editing by Matt Driskill)

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[chowka]

Singapore Stocks-Up by midday led by rig builders

Tue Jan 10, 2012 1:11am EST

* Index up 0.8 percent at 0500 GMT
* S'pore may see technical recession in 1H12-Julius Baer
* Keppel Corp, Sembcorp Marine up on strong order outlook

By Eveline Danubrata

SINGAPORE, Jan 10 (Reuters) - Singapore shares rose by midday on Tuesday, led by oil rig builders Keppel Corp Ltd and Sembcorp Marine Ltd as analysts said the two companies are well positioned to capture more orders.

At 0500 GMT, the Straits Times Index (STI) was up 0.8 percent, or 22.28 points, at 2,713.56. Some 454.6 million shares worth S$449.9 million were traded, compared with 575.7 million shares worth S$353.1 million at the same time on Monday.

The market is expected to closely watch Italian and Spanish debt auctions this week for any signs of progress in the euro zone.

Singapore's economy may get into a technical recession in the first half of 2012 partly due to the high base it was coming from, said Lee Boon keng, head of investment solutions group (Singapore) at Swiss private bank Julius Baer.

But Lee said at a media briefing that fundamentally, the Southeast Asian city-state is still poised for growth.

"Three things work in Singapore's favour. One is the sustained recovery in the United States, another is sustained growth in China, the third is the increasingly more vibrant Southeast Asia," he noted.

On Tuesday at 0500 GMT, shares of Keppel Corp and Sembcorp Marine gained 3.5 percent and 5 percent, respectively, as analysts were upbeat about the demand for rigs.

"Above $85 a barrel [for oil], there's a lot of incentive to do deepwater exploration," said Mark Matthews, head of research Asia at Julius Baer. The bank has buy calls on both Keppel Corp and Sembcorp Marine stocks.

Keppel Corp shares were lifted by its announcement that it had won a contract worth around $150 million from Diamond Offshore Drilling Inc to construct and upgrade a deepwater semi-submersible rig.

DBS Vickers said its order wins assumption for Keppel Corp's 2012 and 2013 fiscal years are S$6 billion and S$5 billion, respectively.

Separately, Singapore brokerage DMG & Partners said in a report on Tuesday that Sembcorp Marine's management was confident of winning more than S$5 billion ($3.9 billion) of new orders in 2012, higher than S$3.7 billion in 2011.

(Reporting by Eveline Danubrata)

 

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UPDATE 1-Singapore's Sembcorp Marine reviews STX OSV stake - source

Tue Jan 17, 2012 2:50am EST

* Sembcorp explores bid for STX OSV stake
* STX OSV shares up 5.8 pct
* $603 mln stake sale comes as STX eyes financial structure

SEOUL/SINGAPORE, Jan 17 (Reuters) - Sembcorp Marine , the world's second-largest rig-builder, is considering buying the 50.75 percent stake in STX OSV Holdings Ltd, a source said on Tuesday, driving STX OSV shares up nearly 6 percent.

South Korea's STX Group, the parent of STX OSV, plans to invite bids for its about $603 million worth stake in Singapore-listed offshore vessel builder STX OSV, a move seen as part of its fundraising efforts.

Online news outlet MoneyToday reported that Keppel Corp and Sembcorp were strong candidates to buy the stake.

Sembcorp has not yet made a final decision, a source close to the deal said.

After the news, STX OSV shares surged 5.77 percent to S$1.375 as of 0725 GMT.

STX said in October it planned to secure 700 billion Korean won in funds via the sale of foreign assets by early this year and was dropping ambitions for large-scale mergers and acquisitions..

STX had chosen JP Morgan and Standard Chartered to manage the sale.

A company official said STX sent memorandums on the sale to about 18 potential investors but declined to give further details.

Its other shipbuilding unit STX Offshore & Shipbuilding said in a regulatory filing in December the shipbuilder sold bonds with warrants worth 100 billion won to repay debt.

Recent market speculation that STX Group was short of funds and planning large-scale fundraising amid weakening sentiment on the shipping and shipbuilding sector pressured the share prices of STX Group companies including STX OSV and STX Pan Ocean .