O&M: Cold headwinds from Brexit buffeting oil companies
- Oil prices were not spared after the UK voted for Brexit with WTI collapsing about 5% to US$47.56/bbl
- With economic uncertainties weighing down on oil prices, the already weak demand for offshore and marine services (O&M) could be further pressured.
- With offshore investments likely to be low for the medium term, we believe that investors who are looking for contrarian buys should look to US-based oil majors instead of the domestic O&M names.
- Maybank-KE last had a Negative rating on the O&M sector.
- The house reiterates its Sell ratings on Sembcorp Marine (TP: $1) and Keppel Corp (TP: $4.42).
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