It will boost business sentiment and consumer purchasing power.

The upcoming Budget 2017 should address the short term needs of businesses and firms if Singapore wants to boost household income and consumption, UOB economist Francis Tan urged.

In this regard, Tan noted how a fiscal stimulus in the form of enhanced tax reliefs will be useful. He said he it has been a year since the new Finance Minister Heng Swee Keat was on the job and the visible shift in the focus of Budget 2016 towards the “centre, from the left” was critical in supporting economic growth over the past few quarters.

"Unfortunately, due to the sluggish external economic environment, Singapore’s GDP for 2016 grew only 1.8%, the lowest annual growth rate since the global financial crisis in 2009. One would wonder if Singapore could have fallen into a technical recession had the government not change emphasis then and continued to focus on social spending," Tan explained.

And even though Singapore has largely dodged a technical recession in the past year, it has continually borne the burden of weaker global economic fundamentals, as well as sector-specific risks especially in offshore and marine sector.

"The rising wave of anti-globalisation rhetoric since UK’s EU referendum continues to bring about uncertainties even as the manufacturing sector had finally climbed out strongly from six consecutive quarters of on-year declines since 2Q 2016," he argued.

However, this has not stop down the slowing in the services sector, as the latter grew at the slowest pace since the 2009 financial crisis, with unemployment rate edging higher to 2.2% in 4Q16 - the highest since 2010.

"As such, we look forward to announcements of a single-year tax relief measure in Budget 2017 to tide businesses and households during this difficult period," Tan stressed. 

Its average daily stock trading was well below Hong Kong and London.

According to a report from Bloomberg, Singapore's desire to host the IPO of Saudi Arabian Oil Co. is understandable. Whether the city-state is the best venue for what could be the world's largest ever share sale is another matter.

The island is considering a range of measures to lure Aramco, including inviting one of its state investment companies to become a cornerstone investor. And Singapore is Asia's No. 1 oil-trading centre, so investors should have a good understanding of the industry.But there are plenty of reasons other cities stand a better chance. Singapore's average daily stock trading was about $761 million last year, well below Hong Kong and London, and IPO volumes aren't what they were.

Get to know the full story here.

Blame the absence of a gain from SilkAir's sales.

The SIA Group reported an operating profit of $293m in the quarter ending in December, $5m higher compared to last year. However, due a $79m write-down of the Tigerair brand and trademark as well as the absence of a gain from SilkAir’s sale and leaseback of four 737-800s reported last year, its quarterly net profit was down 35.7% to $191m.

Group revenue fell $97m YoY to $3.8b, mainly attributable to lower passenger flown revenue in a weak-yield environment. The Parent Airline Company saw its flown revenue decline by $167m, which was partly compensated by growth from Scoot (+$45m). Cargo and mail revenue improved by $8m, boosted by stronger freight carriage.

The group also reported a contraction in expenditure to $3.5m, as net fuel costs declined largely due to the reduction in fuel hedging loss.

Here's more from SIA:

SilkAir’s operating profit was $3 million lower than last year (-9.1%). Total revenue increased $3 million, as passenger carriage rose 10.1%, partly offset by a 7.4% slide in passenger yield. Capacity expanded 10.4% and passenger load factor fell by 0.3 percentage points to 71.3%. Expenditure increased $6 million on the back of capacity expansion, overshadowing growth in revenue.

Scoot saw its operating profit increase by $2 million compared to the same quarter in the last financial year. Total revenue was up $49 million (+35.5%), bolstered by a 44.3% increase in passenger carriage, albeit diluted by weaker passenger yield (-7.1%). Capacity expanded more rapidly, by 51.8%, resulting in a passenger load factor decline of 4.2 percentage points to 80.8%. Expenditure rose $47 million (+39.2%), while unit cost dropped 8.9%.

Tiger Airways’ operating result remained flat year-on-year. Passenger carriage was constant on the back of a marginal capacity drop (-0.9%), and passenger load factor inched up 0.8 percentage points to 83.9%. Revenue declined by $7 million, primarily due to weaker passenger yield (-5.5%). This was offset by a reduction in expenditure, which was mostly attributable to lower net fuel costs.  

One in two believes what they learn in school is not enough for their future.

If the new survey by Glints - JOS is anything to go by, then Singapore millennials are seeing learnings from schools inadequate for their future.

According to the study, more than half of the 1,000 respondents believe that what they are learning in school is not enough for them to land jobs after graduation. Consequently, 78% of them have actively searched outside of school for opportunities like competitions, internships, and projects to gain skills for their future jobs. Further, 82% of the youths are even willing to sacrifice personal leisure time and social time to participate in these opportunities.

Christian Paolo Garaga, a second-year electronics and computer engineering student at Ngee Ann Polytechnic, shared that he would sacrifice study time to grab on opportunities such as the JOS Innovation Awards, a competition for polytechnic and university students to brainstorm ideas through using technology to solve modern problems.

“I would sacrifice my study time for such opportunities. With the changing landscape of the workforce, getting these skills are more important than just learning through the books. Skills taught outside of school is more valuable these days,” Garaga stated.

Glints COO Looi Qin En commented on the results of the survey and said, “Times have changed and relying on the school alone for career preparation is no longer enough. We are seeing an increasing number of youths who proactively pursue opportunities outside of their schools to prepare themselves for their careers. Being industry ready is not just about resume and interview preparation workshops, but having real experiences through internships, competitions and projects. This is the new norm.”

With this, Looi noted that many companies are changing the way they recruit young talents by offering more skills development opportunities to engage millennials.

“We are seeing a shift of mindset from traditional companies who used to hire graduates directly. These companies are beginning to create opportunities for students to develop and showcase their skills, while using these opportunities as avenues for talent attraction and employer branding,” he said.

As such, JOS group human resources senior manager Carmen Chan noted that they organised the inaugural JOS Innovation Awards in Singapore, a competition for polytechnic and university students with the aim of using technology in coming up with ideas to solve modern-day problems. 

“We received an overwhelming response from the polytechnic and university population. Initially setting an ambitious target of receiving 50 submissions, we ended up receiving over 80 submissions with representation from all 5 polytechnics, all 5 public universities, and various private tertiary institutions,” Chan shared. 

The sector makes up 30% of NODX.

Electronics exports remain Singapore’s largest domestic exports category, at 30% of NODX, and it remains a key indicator to track having historically led Singapore’s GDP and stock-market cycle.

According Citi Research, a YoY bottom in the growth rate of electronics exports coincided with that in the STI during the tech bust in 2001, GFC in 2008, and Eurozone debt crisis in 2011. Bottoming in YoY % growth of electronics exports also coincided with bottoming in YoY % GDP growth during the tech bust in 2001, and GFC in 2008.

"This series though has lost some of its efficacy in recent few years. As highlighted in the third quarter economic survey of Singapore, key reasons for this long-drawn decline include weak global semiconductor demand, trend of import substitution for electronics products in China as the largest export market for Singapore (2016 YTD: 14% of NODX) moves up the electronics value chain, and as Singapore companies shift towards fabless manufacturing, offshoring production to other regions. Local firms can then focus on higher-value manufacturing/R&D activities. Such offshoring trends would have the effect of reducing shipments of electronic products out of Singapore," Citi Research said. 

Its hotel brands are segmented by traveller profiles, not by demographics.

If a scholarship did not come Arthur Kiong’s way, he would not have been able to rise as one of the most accomplished CEOs in the hospitality sector. Perhaps, he would have ended up as an established radio broadcaster instead. However, he grabbed the opportunity to study again when he was given the chance for a higher diploma at Shatec Hospitality School. Flash forward to today, he spearheads Far East Hospitality Holdings, which has a portfolio of eight unique brands of hotels and serviced residences.

Operating more than 10 hospitality assets with a combined portfolio of close to 90 hotels and serviced residences, Far East Hospitality has established its presence in seven countries comprising of Australia, Denmark, Germany, Hungary, Malaysia, New Zealand, and Singapore. Singapore Business Review spoke with Kiong to know how his stint as a radio broadcaster helped him become one of the successful players in the hospitality industry.

How did your venture in the hospitality sector start?

I started my career as a radio broadcaster and entered the hospitality sector when I accepted a scholarship for a higher diploma at Shatec Hospitality School. After completing my scholarship, I dove head first into the industry, making sure that I experienced every facet of the industry from operations to sales and marketing, picking up a wide array of skills along the way.

How did your stint as a radio broadcaster eventually help you in becoming a successful business leader in the hospitality sector?

I would say it is the creative process. Radio helped me hone my abilities to conceptualise what may be of interest to an invisible listener. It also taught me how to craft words and tones effectively to communicate ideas. Today, I constantly challenge myself to not see the market as homogenous, but to create meaningfully different hotel brands that address the specific preferences within the mid-tier spectrum of the market.

Tell us briefly about Far East Hospitality and how it started.

Far East Hospitality Holdings Pte Ltd (Far East Hospitality) is an International hospitality owner and operator with a diverse portfolio of eight unique and complementary brands of hotels, serviced residences and apartment hotels, including Oasia, Quincy, Rendezvous, Village, Adina Apartment Hotels, Medina Serviced Apartments, Travelodge Hotels and Vibe Hotels.

Far East Hospitality owns more than 10 hospitality assets and operates a combined portfolio of over 13,500 rooms under its management across close to 90 hotels and serviced residences in seven countries – Australia, Denmark, Germany, Hungary, Malaysia, New Zealand and Singapore, with more in its development pipeline.

Far East Hospitality is a 70-30 joint venture formed in 2013 between Far East Orchard Limited (a listed company under the Far East Organization) and The Straits Trading Company Limited. In the same year, Far East Hospitality, through its wholly-owned subsidiary Far East Hospitality Investments (Australia) Pte Ltd, completed a 50-50 joint venture with Australia’s Toga Group.

What is your approach on tourism and hospitality?

Tourism is about creating compelling strategies, systems, infrastructure, and expertise to persuade foreigners to not only visit our country but also to motivate them to increase their expenditure on a destination level. Hospitality is about creating wonderful memories and experiences for our guests.

They are different sides of the same coin. It is for this reason that we work closely with the Singapore Tourism Board to align our respective efforts, resources, and interests.

What are your key business philosophies? How do these shape your goals for your company?

Having been in the hospitality sector for over 30 years, I have had the opportunity to work with some of the best hospitality operators in the world. I have also worked across different continents.

At Far East Hospitality we want our team to see the bigger picture, and understand our role from various perspectives instead of just the task at hand. We need to understand the business owners’ aspirations, the investors’ expectations, the limitations to the aim and yet be creative enough to formulate and execute the solution to achieve our mission – creating wonderful memories and experiences for our guests.

This can only be done with people who share the same passion and values. This is why we ensure that the working culture and environment we create must attract and retain this quality of talent and allow them to flourish.

It is easy for those working in hospitality to mentality succumb to a task. What does this mean? It is the conventional style of work where people view their job as fulfilling a task – to make up the rooms, to process a booking, etc.

At Far East Hospitality, we are always encouraging our teams to think less conventionally. Instead of following the status quo of providing a service, they are the performers who create wonderful memories for others.

Efficiency, productivity, and profitability are all very important, and we cannot sustain a good business without these elements. However, we must be driven by a higher mission of creating something meaningful for others. This is what we strongly believe in.

What sectoral issue would you like to discuss and what role does your company play in the issue? How will your company be a tool in solving issues, if any?

The hospitality and tourism sectors are constantly changing; travellers have become more self-aware and attuned to what they want. With more information available at the touch of a button, travellers are well-informed of how exactly they can get what they want.

Today, travellers are taking a deeper look into how the hotel fits them, and whether it is in line with the experience they have in mind. This is why for example in Singapore, we are committed to providing a uniquely Singaporean experience for our hotel guests beyond the usual tourist attractions.

What do you think is the biggest differentiator of companies in the hospitality sector? What makes Far East Hospitality different from its peers?

Today’s travellers are less swayed by star-ratings and standardisation. They are looking for the unique, the bespoke, exceptional value, wellness oriented, a different type of stay experience.

We appreciate that travellers are looking for new experiences and accommodation options. We are addressing this through the diversity of our portfolio of hotels and serviced residences. For example, in Singapore, Village caters to families and urban explorers, Quincy for the social connectors, Rendezvous for the conventional travellers, Oasia for the wellness conscious and our serviced residences for those staying beyond a week.

Our hotel brands are segmented by traveller profiles, instead of demographics or countries of origins. This has helped us remain committed to providing a customised and memorable experience for our hotel guests.

Thanks to an exchange gain of $4.8m.

SIA Engineering posted a higher net profit for the past quarter ending in December, up 5% to $53.6m.

Operating profit of $25.2m was $3.8m or 13.1% lower than the same quarter last year. Revenue of $272.3m saw a decrease of $2.9m or 1.1%, mainly from lower fleet management and airframe and component overhaul revenue, mitigated in part by higher line maintenance revenue. Expenditure at $247.1m increased at a lower rate of 0.4% or $0.9m as the current quarter benefitted from an exchange gain of $4.8m, while increases in staff costs were mitigated by lower subcontract costs.

For the quarter, the share of profits of joint venture companies was $14.3m, $3.2m lower than the same quarter last year. However, contributions from associated companies increased by $1.6m or 10.2% to $17.3m. Basic earnings per share were 4.69 cents for the current quarter.

The group said the operating environment of the aerospace industry remains challenging in the face of persisting global economic uncertainties.

"In line with our commitment to pursue strategic partnerships, during the quarter, we signed an agreement with Moog Inc. to establish a Singapore-based joint venture to overhaul Moog’s products, which include components on flight control systems for new-generation aircraft, such as the Boeing 787 and the Airbus A350. With the incorporation of Heavy Maintenance Singapore Services Pte Ltd in October, the joint venture with Airbus will have access to a larger market. While these and other recently formed joint ventures position the company well for the future, they are not expected to be accretive in the near term," SIA Engineering noted.

It added, "As part of ongoing efforts to remain competitive, we will continue to enhance operating efficiencies and manage costs, including investing in new technologies and advancing innovation." 

It is a tie-up with Asian Business Software Solutions.

Small and Medium Enterprises (SMEs) can now enjoy greater convenience and efficiency in their payroll processing with the launch of Maybank’s tie-up with Asian Business Software Solutions (ABSS).

Maybank said this is its first collaboration in Singapore with an external software company to provide services to SME customers. With the said project, SME customers can use ABSS’ MYOB branded payroll software for payroll processing, which supports the bank’s Business Internet Banking payroll file format, and can be used by the companies to directly credit the salaries to their employees’ bank accounts.

Using the payroll software, SMEs can enjoy a host of advantages such as auto-computation of salary and generation of itemised payslips for each employee. The software can also be updated so SMEs will be kept abreast of policy changes announced from regulatory authorities such as the Central Provident Fund (CPF) and the Income Tax Authority of Singapore (IRAS). SMEs will benefit from greater productivity as they move away from manual computations and paper-based payments to automated payroll systems. Upon registration, customers enjoy free 30 days’ introductory technical support to help them to get started.

Choong Wai Hong, head, community financial services, Maybank Singapore said the collaboration shows Maybank's goal of delivering greater value for the SME segment.

“We have observed a growing number of our SME customers carrying out their banking transactions including payroll processing online. The active number of Business Internet Banking customers who log in at least once a month has grown by 35% year-on-year, and the number of SME customers using our online payroll services has tripled over the past year,” he said

Choong noted that Maybank has a suite of online services aimed at helping companies with their payroll, collections, payments and trade document submissions.

"Unlike many other industry players, use of Maybank’s Business Internet Banking is without any monthly subscription fees and has competitive transaction fees," he added.

Blame it on lower profit from operations.

Singapore telco giant StarHub Ltd reported lower bottom line in the past quarter ending in December, down 33.2% to $54m.

This is despite reporting a stable revenue at $634.8m, but full year profit was lower 2% to $2.4b. This decrease for the year was attributed to the lower revenue from the sale of equipment and services.

For the said quarter, the group's EBITDA was lower by 14% YoY at $135.7m, the result of lower profits from operations. This led to a 3% decrease for the full year at $690.1m.

StarHub's mobile revenue decreased slightly for the quarter and 2% for the full year to $311.8m and S1.2b, respectively. Post-paid ARPU decreased by $2 to $70 for the quarter. Pre-paid ARPU, on the other hand, was lower by $2 for the quarter to $15.

Its Pay TV revenue was also battered in the past quarter, down to $93.9m due to the reduced customer base to 498,000 households. Pay TV ARPUs were at $51.

Meanwhile, broadband revenue increased 4% to $54.2m for the quarter. This was driven by the higher mix of customers on fibre and take-up of higher speed cable plans.

Enterprise Fixed revenue also increased 10% as data & internet services revenue clocked in with an increase to $347.2m. This was due to the higher take-up of data & managed services.

StarHub CEO Tan Tong Hai said, “Despite increased competition, we have registered growth in key areas. Mobile, which accounts for half of our total revenue, showed resiliency as we saw an increase in subscriber base and data revenue. Momentum for our Broadband revenue was maintained and we also witnessed a consistent revenue growth in our Enterprise Fixed business.” 

The unit was named John Agyekum Kufuor.

Keppel Offshore & Marine’s wholly-owned subsidiary Keppel Shipyard Ltd is set to deliver a Floating Production Storage and Offloading (FPSO) vessel to Yinson Production (West Africa) Pte Ltd., a wholly-owned subsidiary of Yinson Holdings Berhad.

The spread-moored FPSO unit was named John Agyekum Kufuor during a naming ceremony held at Keppel Shipyard. The unit will be chartered by ENI Ghana Exploration & Production Limited (ENI Ghana) to process oil and gas from the Offshore Cape Three Points (OCTP) block located in
Offshore Ghana.

Michael Chia, managing director of marine & technology at Keppel O&M, said the group has strengthened its relationship with its repeat customers, Yinson and ENI,

“We have a strong track record of customising FPSOs for a wide variety of fields. FPSO John Agyekum Kufuor is our 27th conversion project for Africa, and 125th overall,” he said.

FPSO John Agyekum Kufuor has a storage capacity of 1.7 million barrels, with an oil processing capacity of 58,000 barrels per day. It has a design life of 20 years without
dry docking and can be moored in an average water depth of 1,000m with a total topside weight of almost 15,000 tonnes.

Keppel Shipyard’s work on the FPSO John Agyekum Kufuor included modification work, new equipment installation complete with associated piping, electrical and instrumental systems, as well as installation and integration of the FPSO process topsides. 

But expect some profits today.

The Straits Times Index (STI) ended 2.14 points or 0.07% lower to 3041.94 on Friday, taking the year-to-date performance to +5.52%.

The top active stocks today were DBS, which declined 0.64%, UOB, which declined 1.21%, OCBC Bank, which declined 0.32%, Singtel, which declined 0.52% and Global Logistic, with a 1.16% advance.

According to OCBC Investment Research, this came as US stocks closed near session highs, with the Dow industrials reclaiming a close above 20,000 and the Nasdaq reached a record. Steps by President Donald Trump to roll back bank regulations and a stronger-than-expected January jobs report contributed to the upbeat sentiment.

Meanwhile, ten out of eleven S&P 500 industries ended higher, led by Financials (1.99%) and Energy (0.86%) while Consumer Discretionary (-0.11%) bucked the trend. The index was up 1.79% for the month.

"The rally on Wall Street last Friday could provide some support to the local bourse today," OCBC said.

Here's more from the firm:

Technically, the daily MACD looks to poise for a bearish crossover, and the daily RSI continues to trend down, hovering around 62% now.

We peg the initial hurdle at 3075, ahead of 3100; on the flip side, we peg the immediate support at 3025, ahead of its subsequent support at 3000.

Overall volume rose 8.9% with 2.8b units traded, and total value climbed 1.0% to S$1.1b, while average value/unit fell 7.3% to S$0.40.

And here are some stock investing strategies.

In 2016, Singapore’s bond market faced a series of defaults as companies associated with the oil and gas sector found themselves in a position where they were unable to meet their repayment commitments. According to a report in Bloomberg, five Singapore firms defaulted on bonds of a total value of nearly S$1bil last year. Swiber Holdings failed to meet its coupon payments repeatedly. The company is a provider of services to the offshore oil industry. Recently, it has been under investigation by the Commercial Affairs Department, a branch of the Singapore Police Force. A newspaper report states that the reason for the investigation is not clear. Read the rest of the story here.

Singapore-listed industrial REIT, Cambridge Industrial Trust, will dispose a property at 55 Ubi Avenue 3 for SGD22.1 (USD15.5 million) to an undisclosed buyer. The property, a five-storey light industrial building with approximately 141,135 square feet of gross floor area, has remaining land tenure of approximately 39 years. According to a statement issued by the REIT on 23 January, the divestment originated from an unsolicited enquiry on the property. Get to know the details of the planned divestment here.

For most investors stock holdings make up a significant portion of their overall wealth regardless of how diversified they are in other investment vehicles. When investing in the stock market, there are numerous investment strategies for investors to take, each of which has its own pros and cons for each individual to consider. So which one do you think suits you best? Click here to know.
 

The bank's exposure to the beleaguered group is around $637m.

As Ezra is foreseen to face liquidation, CIMB expects DBS to be hit the hardest, as the bank's exposure to the group is estimated to be $637m.

Ezra has called for a trading halt at the start of the month pending the release of an announcement. CIMB said this could be related to the results of its discussions with lenders and other stakeholders regarding its financial position, which could result in the group, its JV or subsidiaries’ liquidation in the worst case scenario.

"As of 31 Aug 2016, the group had US$989m of term loans and bills payable to banks, including US$568m from 75.46%-owned EMAS Offshore Limited and US$150m from 60.9%-owned Triyards Holdings Limited," CIMB explained.

The firm pointed out that DBS has the largest exposure to the Ezra group of companies at $637m, followed by OCBC at $300m and UOB at $166m. DBS's exposure is due to its lending to EMAS Chiyoda Subsea, given that it was the co-lead arranger for the loan facility for EMAS Chiyoda’s main vessel, the Lewek Constellation.

"Should the entire Ezra group go into liquidation, the banks will have to recognise their exposures as NPLs and make adequate provisions for the unrecoverable amounts," CIMB stated.

It furthered, "Based on 40-80% write-down in book value of fixed assets across the group, we estimate DBS will have to make specific provisions (SPs) of 8-16bp, OCBC: 9-12bp and UOB: 6-7bp. This assumes no SPs have been taken yet and will impact DBS’s FY17F net profit by 6-12%, OCBC: 5-8%, and UOB: 4-5%." 

Firms are becoming gloomy about their outlook.

For the first time in survey history, private firms are becoming gloomy about their production outlook, the Nikkei Singapore Purchasing Managers' Index showed.

According to the survey, PMI slowed to 51.6 in January from 52.0 in December. A reading above 50 indicates economic expansion, while a reading below 50 points toward contraction.

Bernard Aw, an economist at IHS Markit, which compiles the survey, said there were worrying developments in the survey results. "For the first time in the survey history, private sector businesses in Singapore expressed pessimism about their 12-month outlook for output because of slowing economic conditions," he said.

"Moreover, growth in export orders slowed markedly in January, which cast doubts on the recent strong growth numbers in official export data. If new business from abroad slows or even decline in the months ahead amid growing uncertainty about global trade policy, Singapore's economic growth could be affected." 

It acquired the London property for $103m.

City Developments Limited has entered into an acquisition mode as it snaps up Ransomes Wharf site in Battersea, London from Curtaus Trust for GBP58.0m ($103.2m).

According to RHB, CDL plans to develop the site into a luxury residential project with an estimated gross development value of GBP222.0m ($395.2m). The site has an existing planning permission for 118 apartments including 24 affordable homes, eight commercial units and 103 car parking spaces.

"The acquisition doesn't come as a surprise as CDL's lowly geared balance sheet (net gearing of 0.19x) provides it with ample debt headroom (more than $3bn assuming comfortable gearing of 0.5x) to undertake acquisitions," the firm said.

It furthered, "The move is positive as it allows CDL to build on its existing portfolio of ten prime properties and also capitalise on a weak GBP. As its UK properties mainly caters to local market, we expect demand to remain fairly robust despite the ongoing Brexit developments."

It could report a strong net profit of US$460m, UOB believes.

Ahead its announcement, agri-giant Wilman International is expected to report a stronger profit for 4Q16 as profit from sugar division will be recognised. UOB KayHian said Wilmar is expected to reflect a net core profit of US$430m to US$460m.

"In 2016, 4Q16 was likely to have been the strongest quarter in terms of core net profit for Wilmar vs the seasonal peak of 3Q as sugar harvesting was delayed to early-Jan 17 so 4Q16 would have registered a higher crushing volume vs 3Q16," UOB KayHian said.

More so, UOB said palm oil production volume picked up strongly in 4Q16 as 9M16 suffered a severe drought impact from 2015’s EL Nino.

UOB added, " 4Q16 net profit is expected to have factored in deferred tax income arising from the increase in tax depreciable value of its plantation assets. Results are scheduled to be released on 20 Feb 17 after market close." 

Oil prices have increased to $50s currently.

Since OPEC announced that it will cut production for the first time in eight years, oil prices have increased from mid $40s to the mid $50s, OCBC Investment Research said.

The firm said investors are keen to gain exposure to oil plays, especially focussed on the large caps like that of Keppel, Sembcorp, and mid-sized Ezion. This is possibly due to concerns that some smaller companies would face greater financial difficulties under the tough environment.

"We note that there are still a number of smaller companies that are prudently managed and stand a good chance of surviving this market and reaping the benefits subsequently. Meanwhile, our local rig builders Keppel and SembMarine still have to contend with issues in Brazil relating to Petrobras," the brokerage firm said.

OCBC said despite the returning interest in the sector, there is a sense that investors, in general, are still cautious about entering the sector in a big way, given that companies still use the words “challenging”, “difficult”, and “hunker down” to describe their operating outlook and plans.

"We also expect a fair number of them to report impairments in the upcoming full year results. Other than some downstream players that are still operating fairly well, we find that the more optimistic companies are overseas oilfield services players servicing US shale, as rig count is inching up again with a recovery in oil price," OCBC said.