MARKET TALK - DMG keeps Keppel as top offshore and marine sector pick

[LEFT]0357 GMT 4 April [Dow Jones] Keppel Corp. (BN4.SG) is up 1.0% at S$11.04 after the rigbuilder said Wednesday it has secured floating production storage and offloading upgrading projects worth S$170 million from SBM Offshore (SBMO.AE) and Bumi Armada (5210.KU). DMG & Partners estimates the contracts boosted year-to-date order wins to S$1.0 billion and the outstanding orderbook to S$10.4 billion. “We expect FPSO spending to stay strong as the number of floating production projects planned globally has increased 30% in the past 18 months, and we believe Keppel is well-positioned to benefit from the rising trend,” the house says in a note. It keeps Keppel as its top offshore & marine sector pick, with a Buy call and S$13.40 target, based on 16X FY12 P/E vs the stock’s current 13X. It keeps its earnings estimates unchanged as it expects S$6 billion in new non-Petrobras orders in 2012. Bid-ask spreads suggest it won’t test its S$11.10 year-to-date high during the session.[I]- Leslie Shaffer, Dow Jones Newswires [/I][/LEFT]