Stock Name: Kep Corp
Company Name: KEPPEL CORPORATION LIMITED
Research House: CIMB
“This is a critical milestone for the oil and gas industry since the explosion of Deep Horizon last year. We expect more rigs to return to the Gulf, which should improve the utilization and day rates of deepwater rigs,” says CIMB.
Company Name: KEPPEL CORPORATION LIMITED
Research House: CIMB
Keppel Corp. (BN4.SG) is +2.5% at $11.54 and rig building peer SembCorp Marine (S51.SG) is +0.9% at $5.40, rising along with most blue chips amid a broad market rally, while news the Obama administration has approved its first deepwater drilling permit (to Noble Energy) since the Gulf of Mexico oil spill is also adding to the positive sentiment surrounding the offshore & marine sector.
“This is a critical milestone for the oil and gas industry since the explosion of Deep Horizon last year. We expect more rigs to return to the Gulf, which should improve the utilization and day rates of deepwater rigs,” says CIMB.
“The development also endorses a recent capex-spending spree by U.S. drillers, benefiting Singapore yards which are capable of building high-spec GOM safety certified rigs.”
The house keeps its Outperform ratings on SMM, with a $6.38 target price, and Keppel, with a $15 target price. “We anticipate sector catalysts from the announcement of more orders for rigs and production units.”
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