SINGAPORE: RBS has downgraded Singapore's Keppel Corp, the world's biggest oil rig builder, to hold from buy, but maintained its target price of S$13.50.
Keppel Corp reported a better-than-expected 7.8 percent rise in quarterly net profit on Wednesday, helped by better margins from its offshore and marine business, while new orders for oil rigs rebounded.
RBS said it had increased its offshore order estimate for 2011 to S$6 billion ($4.8 billion) from S$5.2 billion, but it downgraded its rating as it believed there is limited upside to Keppel Corp's share price.
The brokerage said it prefers Sembcorp Marine for near-term order win potential as Keppel Corp's 2012 slots are nearly full.
It added that Sembcorp Marine tends to outperform substantially when order momentum improves and the stock has only performed in line with Keppel Corp year-to-date.
Keppel Corp shares closed at S$12.72 on Wednesday. The stock has risen 12.6 percent so far this year.
Sembcorp closed on Wednesday at S$5.94, up 10.6 percent from the start of the year.
Comments
Comments are closed.