SINGAPORE (Mar 6): The offshore and marine (O&M) sector has struggled with a string of macroeconomic uncertainties related to the US-China trade tensions and Brexit, but these have since been overshadowed by the Covid-19 outbreak. KGI analyst Joel Ng identifies the sector to be “one of the biggest losers” in what appears to be the latest event that has roiled stock markets around the world.

“Most financial markets have basically shrugged off on the back of the virus,” Ng tells The Edge Singapore on March 4. “It’s hard to say if there’s more volatility this year than last, but I would say that this is ongoing so it’s a bit too early to say if we’re clear.” The way Ng sees it, the current oil prices, with the Brent Crude at US$51.51 ($71.42) on March 4, are unlikely to get investors excited about O&M stocks. “We still believe that oil prices will bounce back up, given that oil prices are too low,” says Ng.

OPEC members are seeing US$60 at the minimum, and given tighter supply and steadier demand this year, KGI believes there is a chance prices this year might go above the OPEC forecast.

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