DBSV Prefers Singapore Shipyards To China Peers

Singapore shipyards look a better bet right now than SGX-listed Chinese yards, says DBS Vickers. Says Chinese yards facing headwinds of rising steel costs, increasing labor cost pressure, surging CNY; "while the SGX-listed Chinese yards are well run companies, they may be swimming against stronger currents of negative macro trends as we head into 2009." Broker says Singapore yards look better placed as they face less margin pressure for construction of offshore vessels, are more exposed to still-booming offshore sector, have more attractive share price valuations. Maintains Neutral call on Singapore marine sector as a whole; has Buy rating on ASL Marine Cosco Corp. Jaya Holdings, SembCorp Marine and Hold ratings on Keppel Corp. and Yangzijiang.