SINGAPORE (Sept 8): Oil and gas player Swiber’s spectacular financial meltdown appears unlikely to significantly affect local banks, with UOB Kay Hian maintaining its “overweight” on the sector.

“Our call is premised on banks’ cheap valuations, which have already built in expectations of credit losses from the O&G sector,” says analyst Jonathan Koh in a note on Thursday.

On Monday, the interim judicial managers (IJM) announced they have attracted 24 potential investors to the rescue. However, the IJMs stressed that the prospect of saving Swiber hinges on support from all stakeholders to complete the US$1.7 billion worth of projects, says analyst Jonathan Koh.

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