SINGAPORE (Aug 25): Daiwa has maintained its “negative” outlook for the Singapore Offshore & Marine sector, as it turns more bearish than the general consensus on earnings recovery prospects of the Singapore O&M counters.

This comes as Bloomberg data indicates there remains approximately US$250 million ($338.2 million) in SGD-denominated corporate bonds maturing in 2016, including O&G-related corporates such as Marco Polo Marine (MPM), Ausgroup and Vallianz Holdings.

Daiwa analyst Royston Tan notes that the above three counters are currently trading at high net gearing levels and believes that they will most likely turn to banks for refinancing options due to the unlikelihood of bond market being open to issuers from the high-risk O&G sector.

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