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Here’s the safest way to play the shipyard sector’s protracted recovery

Michelle Zhu
Michelle Zhu12/7/2016 01:23 PM GMT+08  • 2 min read
Here’s the safest way to play the shipyard sector’s protracted recovery
SINGAPORE (Dec 7): UOB Kay Hian is upgrading its view on Singapore’s shipyard sector to “market weight” following the latest deal announced by Organization of the Petroleum Exporting Countries (OPEC), which raises oil prices and lifts hope of a reb
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SINGAPORE (Dec 7): UOB Kay Hian is upgrading its view on Singapore’s shipyard sector to “market weight” following the latest deal announced by Organization of the Petroleum Exporting Countries (OPEC), which raises oil prices and lifts hope of a rebound in 2017.

However, the research house expects oil companies to only raise capex in 2018 at the earliest. In the near-term, a gradual rather than sudden recovery is expected for contract awards.

“Production orders take centre stage, but these orders were roughly a quarter of total orders Singapore shipyards had secured in the last cycle,” observe analysts Foo Zhi Wei and Andrew Chow in a Wednesday report.

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