Rebound in Ezra seen to be fleeting amid oil industry woes

SINGAPORE (Sept 26): Ezra Holdings is leading a rebound among Singapore oil-services providers this month, after bearish bets pushed the company’s shares to all-time lows. The rally will be short-lived amid deepening financial distress in the industry, analysts say.

Ezra has surged more than 40% in September, and oil-related companies including Ezion Holdings and Vard Holdings are among the top five gainers on the 129-member FTSE Straits Times All-Share Index for the month. Traders are probably speculating Ezra will get the funds needed to refinance maturing debt after it held talks with lenders, and also covering short positions, said Joel Ng, an analyst at KGI Fraser Securities Pte in Singapore.

Slowing trade and a 50% plunge in crude prices in the past two years have made casualties out of related companies -- from energy-services providers like Ezra to rig-builders such as Sembcorp Marine -- forcing them to restructure debt, post losses or idle some facilities. Since Swiber Holdings applied for a court-supervised rescue in late July over its inability to pay debt, several energy-services companies have asked creditors for leniency, and S&P Global Ratings said the group remains the sector most vulnerable to financial strain.

---

Related Stories

• Marco Polo Marine reports lower 2HFY2024 earnings of $10.7 mil, down 42% y-o-y
• O&M players hitch a ride on offshore wind
• Maybank Securities unchanged on Marco Polo Marine, believes group to be deeply undervalued

---