Brokers' take

Singapore offshore & marine | Negative

Maybank Kim Eng, Jan 19

SETE Brasil's potential bankruptcy and oil's unending rout have brewed extreme pessimism on Singapore rigbuilders. We see no respite over the next six months, given: 1) weak rig orders; 2) contract cancellation risks; and 3) potential asset writedowns.

Factoring these in, we cut Keppel (TP S$4.24) from "hold" to "sell" with de-rating catalysts expected from potential contract cancellations and a broken dividend-yield support.

Maintain "sell" on Sembcorp Marine (SMM) (TP S$1.00) with no visibility of a bottom. Maintain "hold" on Sembcorp Industries, or SCI (TP S$2.30) which appears most oversold but has no catalysts for a…