Kepcorp: DnB NOR maintains Hold with TP $10.50. Expect O&M margins to continue the downward trend from Q1, as competition from Korean yards remains high, as they have far more capacity. Maintain that H211 ordering momentum should slow, as rig owners wanting newbuilds in 2013 would have ordered them in 1H11 and there are tighter yard slots for 2013 delivery, while available slots at Kep for 2013 are likely to be reserved for outstanding options.
Add that there is less urgency for rig owners to place orders as there is greater
uncertainty in the market outlook beyond 2013 and most recently placed rig orders are not backed by charters.
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