Keppel and SembMarine started at 'hold' and 'sell' with target prices of $8.17 and $2.57 respectively by KGI

Stock Name: Keppel Corp
Company Name: KEPPEL CORPORATION LIMITED

Research House: KGI Fraser

Price Call: HOLD

Target Price: 8.17

Stock Name: SembMar.ES.1503
Company Name: SEMBCORP MARINE LTD.ES.1503

Research House: KGI Fraser

Price Call: SELL

Target Price: 2.57

SINGAPORE (Mar 16): KGI is initiating its coverage for the two biggest companies in Singapore Oil and Gas space, with a "Hold" rating for Keppel (Target Price: $8.17) and a "Sell" call for SembMarine (TP: $2.57).

The research house paints a bleak future for the shipyard sector, noting that the oversupply situation is not likely to improve this year, no thanks to low oil prices.

The yards' only saving grace is their decent dividend yields. Keppel pays 5.5%, while SembMarine and Yangzijiang are yielding around 4.5%.