Rig Builders: Deutsche has a sector report, with an overweight call. Highlight recent boost in activity and raises earnings and TP. Note that customer confidence up and new orders should follow soon. Expect an active 1H11 for jackups, with Kepcorp and SembMarine well positioned to benefit…
Believe SG rigbuilders should benefit from any upgrade and/or replacement opportunities with increased scrutiny of aged offshore assets. There should also be greater demand for high specification offshore rigs as drill conditions become more challenging. Rate Kepcorp at Buy with $13.50 TP from $12.50, SembMarine at Buy with $6.90 TP from S$6.30 and SCI at $7.00 from $6.60.
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