Low valuations spell consolidation for O&M sector

Singapore

PLUNGING oil prices have made 2014 a year to forget for offshore and marine (O&M) companies but industry players and observers do not expect things to dramatically improve in 2015, as the industry braces itself for a period of consolidation.

With the price of Brent crude oil falling below the psychological barrier of US$60 per barrel, investors have had a run on O&M stocks in recent months. The Business Times had previously reported that the market capitalisation of 23 O&M firms listed on the Singapore Exchange (SGX) fell 15.7 per cent in a month, as they lost S$5.77 billion over the period from Nov 4 to Dec 4.