SGX Market Updates
5 Largest OSV Plays Average 21% Rebound From 12-Month Lows in 3Q18
PUBLISHED ON |
10 October 2018
10 October 2018
SGX lists 35 Offshore Supply Vessel (OSV) companies, which provide support services to offshore drilling rigs, pipe laying and oil-producing assets used in the exploration and production of oil and gas.
OSV plays are widely regarded as one of the key beneficiaries of a rebound in oil prices. Crude, which has gained more than 20% since the start of the year, continues to hover near four-year highs, on fears of a sustained supply crunch.
In 3Q18, the five largest OSV stocks that saw the strongest price recovery from their 52-week lows were: Vallianz Holdings (28.6%), Mermaid Maritime (21.4%), Sinwa (21.1%), Dyna-Mac Holdings (18.0%), and PACC Offshore Services (17.4%). These five stocks averaged a 21.3% price gain from their respective 12-month troughs.
Singapore Exchange lists 35 Offshore Supply Vessel (OSV) players. These companies provide support services to offshore drilling rigs, pipe laying and oil-producing assets – including production platforms as well as floating production, storage and offloading (FPSO) units – used in the exploration and production (E&P) of oil and gas (O&G).
OSV stocks are heavily dependent on the fortunes of the crude market. They are widely viewed as one of the key beneficiaries of a rebound in oil prices. A robust demand for oil leads to an increase in planned E&P activities, resulting in higher demand for rigs, platforms and FPSOs, which in turn boosts the OSV market.
Crude, which has gained more than 20% since the start of the year, continues to hover near four-year highs, on fears of a supply crunch following a disruption in oil exports from Iran and declining production in Venezuela. While Saudi Arabia and Russia have agreed to boost output, concerns linger over whether OPEC and its allied producers will be able to offset the supply losses. Further boosting prices was Hurricane Michael, which shut some oil fields in the Gulf of Mexico. West Texas Intermediate (WTI) for November delivery traded above US$74 a barrel on the New York Mercantile Exchange yesterday.
The 10 largest OSV stocks on SGX have a combined market capitalisation of nearly S$2 billion. In the July-September 2018 quarter, the five largest OSV stocks that posted the strongest rebound from their 52-week lows were: Vallianz Holdings (28.6%), Mermaid Maritime (21.4%), Sinwa (21.1%), Dyna-Mac Holdings (18.0%), and PACC Offshore Services (17.4%). These five stocks have averaged a 21.3% price gain from their respective 12-month troughs.
The table below details the 10 largest OSV players in terms of market capitalisation, sorted by percentage price gain vs their respective 52-week lows.
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