Otto Marine (G4F.SG) likely to fall after one of its customers wants to cancel shipbuilding contract; shares end flat at 43.5 cents yesterday, says Dow Jones.

Disclosure comes just days after shipbuilder, vessel supplier says difficult market conditions of 2009 appear to be abating, with outlook this year improving.

In latest development, Mosvold Supply wants to call off contract for anchor handling, towing & supply vessel. No reason cited, value of contract not disclosed.

Otto says it has made provision for cancellation, adds move won't have material impact on FY10 earnings.

Cancellation suggests shipping industry still grappling with oversupply of vessels even though credit conditions easing, global trade picking up.

Support for stock at $0.40, last tested in February.