Reuters: Hot Stocks: STOCKS NEWS SINGAPORE-OCBC raises Sembcorp Marine target

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STOCKS NEWS SINGAPORE-OCBC raises Sembcorp Marine target Jun 27th 2012, 00:57 Tue Jun 26, 2012 8:57pm EDT OCBC Investment Research raised its target price on Singapore's Sembcorp Marine Ltd, the world's second-largest rig builder, to S$5.71 from S$5.13 and maintained its buy rating. Sembcorp shares closed at S$4.40 on Tuesday and had risen 15 percent so far this year, compared to a 6 percent gain in the broader Straits Times Index. Sembcorp's share price has underperformed its rival Keppel Corp Ltd since late February, dropping by about 13.9 percent versus Keppel's 8.7 percent fall, OCBC said. OCBC cited Sembcorp's disappointing first-quarter earnings, risk aversion which affected the higher-beta stock, and a recovery in sentiment for property stocks that bolstered Keppel which has property arm Keppel Land. OCBC said this may reverse in the coming months as it still holds a positive view on the premium offshore rig market, Sembcorp is likely to catch up in orders and the company's earnings are expected to pick up in the second half of 2012. "Enquiries for newbuild rigs remain healthy as major oil companies take a long-term view on oil prices in their capital expenditure plans and hence are much less affected by short-term fluctuations in oil prices," OCBC said. It added that Sembcorp's net order book of S$7.4 billion ($5.8 billion) provides good earnings visibility and defensiveness during an uncertain global economy. 0854 (0054 GMT) (Reporting by Eveline Danubrata in Singapore; eveline.danubrata@thomsonreuters.com) ($1 = 1.2803 Singapore dollars) Link this Share this Digg this Email Reprints

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