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FOLLOWING news of Keppel Singmarine's newly-clinched S$265 million contract to build an ice-class multi-purpose vessel, Nomura reaffirmed its "reduce" rating on Keppel Corp, keeping a target price of S$7.95.
Said Nomura in a research note: "(This is) due to a weak new orders outlook owing to a global oversupply of jackup rigs in 2015, and potential FY15-16 earnings downgrades by the Street.
"Indeed, the near-record newbuild jackup rig deliveries in 2015 will lead to industry oversupply, and thereby disrupt the newbuild market."
Adding that Keppel has had a "reasonable start to the year" in terms of new order wins, Nomura estimates the group's net order book at S$13.4 billion at end-2014, compared to S$14.2 billion at end-2013.