O&M

O&M: Nomura has sector report. Expect SG yards to continue delivering on their strong orderbooks, with both KEP and SMM naming ceremonies for ultra high spec jack-up rigs over the weekend marking important milestone completions. With the high chartered out rate of the new rigs and the increased preference for new high spec jack-up types, believe the offshore jack-up rig replacement cycle remains intact……

House Reiterate BUY rating on KepCorp and SembMarine. KEP trades at FY11/12/13F PE of 14x, 13x and 12x, vs historical P/E band of 7x and 22x with a div yield at 4%, while SMM trades at FY11/12/13F PE of 16x, 15x and 14x, vs historical trading band of 8x and 28x, with a divi yield at 3%.