Despite tumbling stocks, Singapore's O&M spending upcycle stays intact
Demand for rigs is rising despite the continuing global financial woes that have hurt offshore and marine stocks.
DMG Research noted the tight availability of rigs in the market due to rising demand and fleet renewal despite the dip in share prices of O&M stocks.
The analyst cited the demand for rigs as one of the catalysts for growth in the O&M sector, whose stocks have been battered by the rising risk of a European crisis and lower oil prices.
The fall in share prices also affected Chinese shipbuilding stocks.
“We expect Singapore offshore rig builders to add more new orders and enhance their revenue visibility, which now extends up to 2015 and beyond,” DMG Research said.
It noted the improved financing for established clients, although not for speculators.