It full-year FFB output moderated to a 6.4% decline.

Agribusiness First Resources saw a decent recovery in it fresh fruit bunch yields in 4Q16, easing its 14% decline in output during 9M16 to only 6.4% for the whole year.

According to RHB, First Resources would be able to grow its FFB output by 8.3% going into this year, as productivity returns to normal.

"Going forward, we expect First Resources’ FFB growth to return to normal from FY17, as its trees fully recover from the El Nino impact," RHB noted.

It added, "We expect the company to register FFB growth of 5-10% pa for FY17-18, as there is not much contribution from new areas coming into maturity over the next few years." 

The Singapore Budget unveiled a raft of new measures aimed at getting Singapore's reluctant SMEs/SMBs (small media enterprises/businesses) to go digital and use technology in their businesses. It basically amounted to throwing money at the problem. This seems to not only miss the point but not having learnt from previous times when this was tried.

To increase productivity amongst this same target audience, Singapore created the PIC scheme which basically gave out money for doing things that you were going to do anyway like buy a laptop or go on some training. It failed. Productivity actually declined after it was launched and for every year since. It has since been massively scaled back. I wrote an SBR blog about that in 2015.

Singapore is offering $2b over four years to persuade SMEs to go digital. Finance Minister Heng Swee Keat said in his Budget speech, "Technology is reshaping businesses, jobs, and lifestyles across the world. We must spot the opportunities in the digital economy, and make the most of our strengths as a nimble, well-educated, tech-savvy society." All very admirable.

However I think it misses the mark. First, there needs to be a cultural and mindset change. Singaporean-run businesses like the traditional way of doing things and don't like to confront technology even when their customers are doing so.

Uber vs local taxi cabs, for example (I wrote an SBR blog on that subject too), ComfortDelgro, (Singapore's largest taxi operator) tried to get the authorities to create protectionist laws that benefitted them and not consumers rather than embrace technology, then blamed Uber when in fact the customers had already deserted them precisely because they were not and still are not embracing technology.

I run a social media technology business and meet entrepreneurs across the world to discuss how to use social media to enhance personal brands, employer branding, create a content marketing strategy, and generate leads/new business. I am always stunned that the typical reaction amongst Singaporean-run businesses (as opposed to expat-run ones) is that they don't need it. They have their contacts, they meet them for a coffee or beer, and they don't need technology to do this, they get referrals and that's how they do it.

These business leaders will be the first ones to complain when their referrals dry up and their contacts no longer use them. They have based their entire new business strategy on being reactive and lazy as opposed to proactively going after business by using technology and social media. Being able to find people exactly using social media/content marketing and creating a rapport with them online and then meeting them for the first time as a result of this technology just doesn't appeal to them. Way out of their comfort zones.

Does it also point to a mindset of a lack of ambition? Quite happy with the status quo, no need to change anything, hope everything works out. Meanwhile, the world is moving on without them, leaving them behind. The established taxi company vs Uber all over again, played out in every industry and effecting every SME business. Totally preventable but not by throwing money at it.

Singapore is a small market but it's ideally placed for attacking other Asia Pac countries. If you want to. With the best airport in the world and the fastest internet speeds, there really is no excuse for not exploring opportunities to grow unless of course you just want a lifestyle business and one that has reached its peak.

I'll give you a great practical example. I created a "Rock Star Profile Global Tour 2017" concept putting on Exclusive LinkedIn Workshops For Entrepreneurs in places I had never been for my current business, including Melbourne, Perth, and New York. I also did them in places where we already had clients, Sydney, Hong Kong, and Singapore.

Using the data on LinkedIn's Sales Navigator, I was able to identify entrepreneurs in each location that had many connections in common with me and were active on LinkedIn and was able to send them a short message saying that I was visiting their location and would love to meet up and they were welcome to attend my workshop.

This has resulted in sold out workshops so far in Sydney, Singapore, and Melbourne and second dates being added to Sydney, Singapore, and Hong Kong. I also have over 25 meetings in Melbourne, for example, that have all been found on LinkedIn and qualified. This is a city, don't forget, that my business has no presence in and has never targetted before. They wouldn't know who I was from Adam.

All I did was use technology to find them and reach out and suggest a more traditional approach of a meeting to discuss their needs further and how using LinkedIn could benefit them too. Not rocket science but alien to many Singaporean-owned companies even in their own city of Singapore.

In that context, by using this technology these SME owners could increase productivity and sales by merely using something already there and relatively cost-effective ($100 a month for Sales Navigator). On that basis, do you really think offering these same business owners $ to better use digital in their workplaces is going to make any difference at all to their way of working? Won't it be like the PIC all over again and just be a way businesses can get $ from the government without actually changing anything at all?

The government clearly gets it and is aware of it and the opportunity, as Heng said, "Enterprises are the heart of vibrant economies [and] for our enterprises to stay competitive and grow, they will need to develop deep capabilities... There are three capabilities that many firms will need in common – being able to use digital technology, embrace innovation, and scale up." Spot on.

They want you to do it, they're even offering you free advice, help, and grants to do so, but the larger question is do you really want to do it and will you be bothered to put the free advice offered as part of this $2b package into actual operation in your company?

I do enough LinkedIn talks to know that 100% of people attending would certainly benefit from enacting just some of the tips as to how to improve their LinkedIn profile to achieve their goals. However I also know from experience of following up with these same people that 75% of them won't have done anything and won't change a thing but will be the first people to complain that they can't achieve their objectives because someone beat them to a new contract or took their client.

As the saying goes, you can bring the horse to water but you can't make it drink.

While software, hardware, and telecom firms enjoy a high talent demand.

Tracking muted growth across Southeast Asia, Singapore’s banking and finance sector posted a 2% year-on-year (y-o-y) decline in online hiring, according to the Monster Employment Index (MEI).

The MEI is a monthly gauge of online job posting activity, based on a real-time review of millions of employer job opportunities culled from a representative selection of career websites and online job postings across Singapore, Malaysia, and the Philippines.

The Index does not reflect the trend of any one advertiser or source but is an aggregate measure of the change in job listings across the industry.

Aside from the banking and financial services sector, other industries that posted negative growth include retail/trade and logistics (-7%); advertising, market research, public relations, media and entertainment (-5%); engineering, construction, and real estate (-5%); and government/PSU/defense (-1%).

Meanwhile, the hospitality and IT/BPO industries posted the highest growth, registering 11% y-o-y growth. The consumer goods/FMCG/food sector also posted positive growth at 7%, followed by education at 5% and health care at 3%.

Software, Hardware, and Telecom professionals also witnessed the most demand on-the-year, posting a 21% y-o-y growth.

“The rapid infusion of finance and technology will require talent in finance to advance their skills and knowledge in cloud computing and analytics to stay abreast of new trends and technologies,” said Sanjay Modi, Managing Director at Monster.com – APAC and the Middle East.

Driven by robust economic growth and strong domestic demand, the Philippines posted a 19% y-o-y increase in online hiring for the banking and finance sector, while Malaysia also recorded an 11% y-o-y growth.
 

Local markets could remain cautious today.

The Straits Times Index (STI) ended 8.41 points or 0.27% lower to 3108.62 on Monday, taking the year-to-date performance to +7.91%.

The top active stocks today were DBS, which declined 0.32%, CapitaLand, which gained 0.55%, Singtel, which gained 0.51%, JSH USD, which declined 0.61% and ComfortDelGro, with a 0.41% advance.

This came as the U.S. stocks overcame early weakness to push further into record territory, with the Dow industrials posting a 12th straight record close as investors await a speech Tuesday night by President Donald Trump.

OCBC said six out of eleven S&P 500 industries ended higher, led by Energy (0.87%) while Telecommunication Services (-1.21%) led the losses.

"Despite the gains on Wall Street overnight, local sentiment could remain cautious ahead of the Trump speech, limiting any near-term upside," OCBC noted.

Here's more from the firm:

As before, we keep the initial hurdle at 3140, ahead of 3165; on the downside, we maintain the immediate support at 3100, ahead of 3070.

Overall volume shrank further 29.3%, dropping to 2.3b units traded, and total value fell 19.6% to S$1.1b, while average value/unit gained 13.8% to S$0.50.

 

Supermarket growth is expected to slow sharply as online grocery gain traction.

The going is to get tougher for Singapore supermarket giant Sheng Siong this year as the market is foreseen to slow down sharply.

Citing a study from Euromonitor, Maybank KimEng said the compound annual growth rate of supermarket revenue is expected to ease at 1.6% in 2016-2021, compared to 4.5% in 2011-2016. Maybank said this comes as online grocery gains traction.

"Watch out for the potential entries of Amazon and Tesco. Even management agreed that the online shopping model is better than brick & mortar," it noted.

Even with Sheng Siong's strong stance as a supermarket player, Maybank noted that it will be difficult to thrive.

"An ROE decomposition shows that Sheng Siong’s growth so far has been achieved on large margin improvement, which is nearing the limit and we expect further margin uplift to slow. Asset-use efficiency has suffered since 2014 since it started buying assets, and now even new store sales growth could be affected by increasing site competition. Finally, the last ROE lever, financial leverage, could be used to acquire growth but that could mean raising the risk profile beyond what investors would be willing to accept," it explained. 

And check out what other tech plans PM Lee has in mind.

Singapore Prime Minister Lee Hsien Loong envisions the country to shape technology more as it gears toward the realisation of the Smart Nation Initiative.

During the dialogue at Camp Sequoia, PM Lee said Singapore has an advantage as a city that is compact and wired up.

"It is economical for us to provide very high-quality infrastructure, and we have people who take to it naturally. Individually, they know how to operate their phones or play Starcraft, Warcraft. That is why we pay attention to encouraging start-ups, using tech, having what we call a Smart Nation initiative," he said.

One such technology he would like to see is a good electronic payment system. PM Lee argued that Singapore has a lot to learn from other countries in terms of cashless payment systems.

"We have not gone as far as we need in order to do cashless payments in hawker centres, in shops, between people. I was complaining to my Permanent Secretaries the other day. The Ministers have lunch once a week together, we pay for our own lunch and there is one Minister in charge of making a collection. We made a great step forward when he said: 'I do not want to receive cash anymore, please write me cheques.' The Permanent Secretaries told me they are one step ahead, they use Pay-lah, which is a DBS application. But it shows how non-pervasive it is and what the potential is if we can get it through," PM Lee explained.

More so, PM Lee mentioned that the government is thinking about a national identity system aside from SingPass, which is used for government services.

"It does not even extend to hospitals which are restructured, semi-privatised. We need a good digital identification service which is reliable, which everybody can rely on. I can sign, I can identify myself, I can access services securely, and I can transact services online. The Estonians have this: there is no reason why we should not have it," he stressed.

Meanwhile, PM Lee pointed out that the transport system could benefit from the use of information technology, making the system more responsive and adaptive. It will also be able to cut down on empty routes and unnecessary services 

Thanks to the strong contributions in the palm and lauric's segment.

Agribusiness Golden Agri-Resources Ltd and its subsidiaries recorded revenue of over US$7.2b for the past year, with net profit reaching US$400m.

For 4Q16, net profit climbed to US$46m, a 133.2% increase from $19.3m during the same period last year.

According to the group, it was able to deliver stronger earnings bolstered by its integrated business model and the appreciation of crude palm oil (CPO) market prices, more than offsetting weaker palm product output.

Further, the enhanced deferred tax income arising from the increase in tax depreciable value of plantation assets boosted its bottomline.

"For future tax benefit, GAR revalued some of its plantation assets in Indonesia resulting in substantial deferred tax income contributing to its current bottom line. The net tax impact recorded from this revaluation was US$304m for the full year 2016 including US$62m in the fourth quarter," Golden Agri noted.

Here's how the group's segments performed:

Plantations and palm oil mills

Palm product output in the fourth quarter of 2016 improved by seven percent year-on-year and 40 percent quarter-on-quarter to 877,077 tonnes. However, the
recovery in quarterly fruit production since mid-2016 did not compensate for the impact of the severe El Niño conditions in 2015 on full year production. During 2016, upstream business production was still 15 percent lower than last year at 2.5 m tonnes of palm products.

Weaker plantation output was the main factor affecting the financial performance of our upstream business. EBITDA1 recorded at US$379 m during 2016, nine percent lower than the previous year. Nonetheless, fourth quarter EBITDA saw a recovery, experiencing a 30 percent year-on-year growth to US$140 m.

As at end of 2016, GAR’s total managed planted area was 488,252 hectares, a slight increase from 485,606 hectares last year. This increase was mainly due to the consolidation of acquired plantations. GAR has been focusing on replanting activities for the past few years. This is part of our strategy to grow through intensification by using next-generation, higher-yielding planting materials to support sustainable production growth.

Palm and laurics

The palm and laurics segment has been growing its contribution to GAR’s EBITDA as a result of our focus on enhancing margins across the value chain.
With US$181 m of EBITDA1 in 2016, it contributed 32 percent to total consolidated EBITDA while margin improved to 2.9 percent from 1.9 percent
last year. Fourth quarter EBITDA1 recorded at US$45 m, significantly higher than the same period last year. 

Oilseeds and Others

The oilseeds and other segments mainly represent our business in China. These segments have maintained their positive contribution with total EBITDA of US$12 m during 2016, slightly lower than last year’s US$16 m. GAR will continue to explore long-term strategic alternatives for the oilseeds business and prudently manage our risks to minimise the impact of any unexpected market volatility. 

Blame the contraction in biomed and general manufacturing cluster.

Singapore's manufacturing output eased to 2.2% growth in January, following a 21.3% uptick in December. This is due to the contraction in biomed and general manufacturing.

Figures from the Singapore Economic Development Board revealed that excluding the biomedical manufacturing, the output grew 7%.

The precision engineering saw a 24% increase while the electronics recorded 14.8% uptick. Chemicals segment enjoyed a 3.5% growth. On the other hand, transport engineering output fell 3.8%, biomedical saw a 13.5% decline, and general manufacturing reflected a lacklustre 13.8% slump. 

Both are key components in the evolution to 5G.

Telco giant Singtel and communication technology service provider Ericsson are joining hands to pilot Massive MIMO and Cloud RAN on Singtel’s 4G LTE network.

According to a joint press release, both technologies are key components in the evolution to 5G that will enable Singtel to expand its mobile network capacity to offer faster speeds by the end of the year.

Massive MIMO, a key to achieving Gigabit LTE speeds, expands the network capacity as it improves spectral efficiency to triple or quadruple the number of data paths of cellular base stations. Ericsson AIR 6468 radio, providing 64T64R Massive MIMO capabilities, will be tested and progressively deployed on Singtel’s 4G LTE network.

Both companies will also embark on a pilot of Cloud RAN which will provide Singtel with the flexibility to centralise, distribute, scale and virtualise radio access network functions to efficiently meet performance requirements today and on the road to 5G.

“Data traffic is on the rise and will increase exponentially with 4K video, Virtual Reality and Augmented Reality services on the horizon. We are investing ahead to ensure that our networks have the capacity and speeds that will offer our customers the best mobile data experience in Singapore,” Singtel Consumer Singapore CEO
Yuen Kuan Moon said.

To recall, Singtel and Ericsson first signed a 5G MOU in January 2015 and were the first to showcase a 5G system in Southeast Asia in August 2016, achieving a downlink speed of 27.5 Gbps. 

Low-interest rates and a stable economy are here to stay.

Singapore’s property demand remains "very resilient," supported by factors including low interest rates and a stable economy, National Development Minister Lawrence Wong said.

“Our economy is still growing, so I think demand is still healthy and our assessment is these factors will remain for some time,” Wong, who’s also the second finance minister, said in a Bloomberg Television interview with Haslinda Amin.

He added, “If you look at the property measures, the cooling measures, they have helped to achieve a soft landing in the property market. And you look at the market today, in fact, demand remains very resilient. Property volume in terms of transactions has increased. Not decreased. Increased in the last year - both in the primary and in the secondary market in terms of resale. And I think that is due to a few reasons. Interest rate remains low even though the trend is going up. It remains at a historically low level. And our economy is still stable, it is still growing. So I think demand is still healthy, and these factors, our assessment, these factors will remain for some time. So we have not made any move in the Budget.”

Singapore home prices fell 3 percent in 2016, with prices declining for the 13th straight quarter in the last three months of the year for the longest streak since data was first published in 1975. Still, Singapore house sales last year topped 2015’s tally as a third straight year of price declines stoked pent-up demand from home buyers.

Read the rest of the story here.

But Q4 net profit rose 143% to $147.5m.

Global energy, water, and marine group Sembcorp Industries Ltd. increased its Q4 earnings 143% to $147.5m compared to just $60.8m from the same period last year. The company also posted a net profit of $394.9m and a turnover of $7.9b for the full year 2016, lower than $548.9m and S$9.5b recorded in the previous year.

The biggest contributor to the Group’s earnings is the Utilities business, whose profit, excluding exceptional items, grew 4% from FY2015 to $348m driven by strong growth in its China operations. In 2015, the business also divested an Australian waste management joint venture and municipal water operations in the UK and Zhumaidan, China, and recorded exceptional items totalling $369.9m.

The Urban Development business recorded a net profit of $33.3m, against $33.5m in 2015, while the Marine business posted a net profit of $48.3m, a recovery from a net loss of $176.4m in the past year.

“Operations outside Singapore contributed over 60% of the business’ net profit, demonstrating the success of our overseas strategy,” said Tang Kin Fei, group president and chief executive officer. Tang further sees the market environment to remain challenging in 2017, but he is optimistic about the company’s resilience.

Several developments can weigh on Sembcorp’s performance for 2017. In China, the Yangcheng cooperative joint venture agreement has expired, while in India, its second thermal power plant has yet to secure long-term power purchase agreements. To sustain growth for its Utilities business, the company aims to focus on operational excellence and on executing long-term projects.

For its Marine business, Sembcorp sees opportunity in rising global demand for gas, which can benefit its broad-based LNG solutions and capabilities. For Urban Development, the company is banking on land sales in its urban developments in Vietnam, China, and Indonesia.
 

Thanks to its new stores.

Supermarket chain Sheng Siong posted a 10.4% year-on-year (yoy) increase in net profit to $62.7m on the back of higher revenue and improved gross margin.

Revenue increased 4.2%, of which 6.2% was contributed by new stores and 0.2% by comparable same store sales from old stores, but was offset by a reduction of 2.2% arising from the temporary closure of the Loyang store.

Gross margin also grew to 25.7% compared to 24.7% in 2015, attributed to lower input prices resulting from higher rebates from suppliers.
Operating expenses, however, also increased with additions to staff headcount and expenditures for renovation and purchase of new stores and warehouse facilities.

“We are delighted to remain on track for our store expansion plans with the opening of four new stores in 2016, representing a 4.4% growth in our retail area,” said Lim Hock Chee, the group’s chief executive officer. He also added that the group has begun improvement works to the Block 506, Tampines Central store, and will soon redevelop the Verge and Woodlands Checkpoint supermarkets.

Lim said that as well as nurturing the growth of new stores, the company is also eyeing to enhance gross margin by seeking efficiency gains in the supply chain and driving for a high mix of fresh produce.

Despite further plans to expand, the company is tempering its growth outlook, citing that the sluggish economy has made consumers more cost conscious. Competition for retail space has also not abated, with smaller supermarket operators aggressively bidding up rent of new shops.

The weather has also affected vegetable and seafood prices towards the end of 2016, and further disruption to the supply chain will affect the group’s gross margin if increases cannot be passed on to the customers. 

Preparations are underway for the first new listing of inverse ETFs.

According to Bloomberg, Singapore Exchange Ltd. last week published a new web page about the products, described as “a form of passive collective investment schemes (like ETFs) and structured as open-end funds,” following revised guidelines from the Monetary Authority of Singapore in August. Preparations are underway in Singapore for the first new listing of leveraged and inverse exchange-traded funds in almost eight years.

Singapore, along with Hong Kong, is seeking to capture a bigger share of an expanding pie through types of funds that have seen success in Japan, Taiwan and Korea. Leveraged ETFs in Taiwan, which started in 2014, now have more than $4.8 billion in assets, according to data compiled by Bloomberg. Daily trading of inverse and leveraged funds is more than half of Taiwan’s ETF market, said Andy Chang, president and chief executive officer of Cathay Securities Investment Trust Co. Read more here.

Due to the absence of profits recognised a year ago.

City Developments Limited report a lower full-year net profit, down 11.9% to $762.6m. This is despite strong residential sales in Singapore and China, and divestments including the sale of Summervale Properties.

The lower earnings were due to the absence of the substantial profits recognised last year from CDL’s second Profit Participation Securities (PPS) platform.

Meanwhile, full-year revenue rose 18.2% to a record S$3.9b, up from $3.3b in the previous year. For Q416, revenue rose 36.5% to $1.2b from $855.0m in Q415.

"The increases were driven by the property development segment, with strong maiden contribution from Hong Leong City Center in Suzhou and steady sales of Singapore projects Gramercy Park, Coco Palms, D’Nest and The Venue Residences and Shoppes, as well as revenue recognition in entirety from the fully sold Lush Acres Executive Condominium (EC), which obtained Temporary Occupation Permit (TOP) in June 2016," CDL noted.

Here's the operations review and prospects for its Singapore property development segment:

• In 2016, CDL and its joint venture (JV) associates sold 1,017 residential units including ECs, at a sales value of about S$1.25 billion, emerging as one of the top-selling private sector developers in Singapore (FY 2015: 674 units with total sales value of S$691.5 million). 
• The 519-unit Forest Woods JV development, a short walk to Serangoon MRT station and NEX Shopping Mall, was one of 2016’s best-selling private condominium projects in Singapore. Over 75% of its units have been sold to date.
• Other JV projects have also sold strongly. For instance, the 616-unit Jewel @ Buangkok is fully sold, the 944-unit Coco Palms at Pasir Ris is over 92% sold and the 638-unit The Brownstone EC next to the upcoming Canberra MRT station is 84% sold.
• In view of the good take-up for the 174-unit Gramercy Park luxury project at Grange Road, where 56 units (or 64%) of the 87-unit North Tower (Phase 1) have been sold since its soft launch in May 2016, CDL is planning to launch the South Tower (Phase 2) by 1H 2017.
• Subject to market conditions, CDL also plans to launch the 124-unit New Futura in 2H 2017. Designed by world-renowned architect SOM, the upmarket freehold condominium at Leonie Hill Road is a fiveminute walk to the famous Orchard Road shopping area and features a double-storey clubhouse, lap pool and six sky terraces with panoramic city views. 
• CDL’s office portfolio continued to enjoy healthy occupancy of 95.9% as at 31 December 2016, above the national average of 88.9%.
• The Group’s JV mixed-use development, South Beach, obtained its final TOP for the entire project in December 2016. Both the South Beach Tower (office) and the retail spaces are fully leased, and the rebranded 634-room JW Marriott Hotel Singapore South Beach soft opened for business in midDecember 2016.
   

But they find it hard to secure a full-time permanent job.

A survey by Nanyang Technological University (NTU), National University of Singapore (NUS) and Singapore Management University (SMU) revealed that students who graduated from Singapore universities last year are earning higher starting salaries. However, they struggle to find and secure full-time permanent jobs.

Polling 10,904 of the 13,953 fresh graduates from NTU, NUS, and SMU last year, the joint graduate employment survey found out that fresh graduates earned a median starting pay of up to $3,360.

Meanwhile, the survey also noted that 89.7% of the graduates landed a job within six months of their final examination. However, the ratio of those that secured full-time permanent jobs fell from 83.1% in the past year to 80.2% in 2016.

Amongst the three schools, SMU graduates earned the highest median starting salary at $3,500. NUS graduates are earning $3,400 while NTU graduates have a $3,300 paycheck.

It launched a cash offer for IHC at $0.106 per share.

Integrated property developer OUE Limited announced its intention to launch a mandatory unconditional cash offer for International Healthway Corporation Limited.

The offer is to purchase a further 593,470,029 shares, representing 35.77% of the share capital of IHC.

According to OCBC Investment Research, OUE currently owns a 57.6% aggregate stake in IHC, which makes its offer unconditional.

"Management intends to expand into healthcare real estate which will be a strategic fit to its existing asset portfolio," OCBC noted.

OUE executive chairman Stephen Riady said, "Given the rapidly ageing population in Japan and Asia and the consequent rising demand for healthcare, it is a timely entry into a sector that we see has tremendous growth potential.”

It added, “With OUE’s proven expertise in property development, we can leverage our experience and track record to add value to the quality assets under IHC’s portfolio." 

The said bank narrowed its gap between the other two. The non-performing loan ratio of DBS and OCBC continued to increase moderately in the past quarter, driven mainly by their lending to oil & gas service companies which have been the most severely impacted by low oil prices.

It was UOB which recorded the highest NPL ratio amongst the three, although it is slowly narrowing the gap between its NPL ratio and the rations of the two other banks.

"UOB's asset quality improved in Q4 2016, through fewer new NPLs, recoveries through collateral disposals, and some write-offs," Moody's Investors Service noted.

The research entity noted that the asset quality challenges posed by the troubled oil & gas service companies will persist over the next few quarters.

"Nonetheless, new nonperforming asset (NPA) formations for such companies should normalise, facilitated by gradually stabilising operating conditions in the industry following the trough in 2016. OCBC and DBS have said that their NPLs for this segment will stabilise if oil prices reach USD60/barrel — in terms of Brent crude — and remain at that level for some time. Such a level would be close to the USD50-USD55/barrel seen in recent months," it explained.