SG Market: Spore shares expected to recover lost ground after growing hopes for another Fed stimulus package powered a 3% rally on Wall Street. First stop for the STI would be to close the breakdown gap at 2820 before heading towards the next resistance at 2910. While the market may be primed for a technical rebound from oversold levels, sentiment remains fragile & there may be another selldown if nothing substantive comes out of the Fed’s Jackson Hole summit.
On the O&M front, Daiwa became the 1st to downgrade the rigbuilding sector to Neutral from Positive, to factor in potential headwinds from macro-economic uncertainties & increase likelihood of a recession. Notes the sector has a high share-price correlation with oil prices & was sold down during the global financial crisis despite strong fundamentals. The house maintains Outperform on Keppel Corp, but lowers TP by 25% to $10.24. Highlights Keppel as the sector top pick given its lowest earnings risk, attractive valuations & share price upside potential. Downgrades both SembMarine & Sembcorp Industries to Hold from O/PF with TP slashed 37% & 27% to $3.81 & $4.22 respectively.
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