MS Keeps Attractive View On Singapore O&M Sector

[Dow Jones] STOCK CALL: Morgan Stanley keeps Singapore offshore & marine sector at Attractive on record oil prices and expected new orders for deep-water rigs, but warns business still cyclical; "don''t forget to get down in time." Says current rig building cycle started in 2005, believes cycle now at midpoint, could last another 4-5 years. "Improving visibility, stretched lead times, and inelastic capacity expansion response should continue to drive the cycle upward." Notes, however, competition intensifying, customers gaining more bargaining power, new jack-up orders slowing, margins eroding on higher costs and USD weakness. Says SembMarine (S51.SG) currently trading at 17X 2009E EPS, rates Overweight; Keppel (BN4.SG) trading at 14X 2009E EPS, rates Equalweight; Cosco (F83.SG) trading at 14X 2009E EPS, rates Overweight. "We believe that offshore stocks could trade up to peak multiples of 20X with positive news flow and high oil prices."