2 reasons why investors shouldn't worry about Keppel's execution risks

Fears valid but could be overblown.

Given the pace of new rig orders coming Keppel's way -- it has secured another $240m jack-up from repeat customer, Mexico's Perforadora Central, and has signed an MOU with Pemex to possibly support construction of 6 KFELS B Class jack-up rigs -- investors may be concerned whether or not the firm will suffer from execution risks.

PhillipCapital though shrugged off those fears because of two potentially risk-minimizing factors: "Investors may be concern with increased execution risks due to the operating of a new overseas yard, however we think such risks could be minimized by similar-designed rigs as well as 'closeness' to its US yard AmFELS."

The research firm added that noth the new order and MOU should be seen in mostly a positive light as they "reaffirm and strengthen" Keppel’s competitive advantage of ‘near market, near customer’ strategy in meeting local content requirements. 

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