OCBC expects Singapore’s oil and gas sector to see relatively good performance in early 2013, keeping an Overweight call, but it tips being selective, with macroeconomic events set to drive sector performance near-term.
“Brent and WTI crude are hovering around $93/bbl and US$111/bbl, respectively, and are expected to remain supportive of capex in the offshore industry. However, March has become the new December, and cautiousness may start to emerge in February as political brinkmanship in the US intensifies before the March fiscal cliff deadline.”
OCBC notes recent investor interest has focused on the small-mid cap segment, but the house still likes the rigbuilders for clear earnings visibility, favorable industry outlook and ability to outperform smaller peers during periods of market uncertainty. Its picks are Keppel (BN4.SG), SembMarine (S51.SG), Ezion (5ME.SG) and Nam Cheong (N4E.SG).
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