Singapore Exchange Ltd (SGX)

Singapore Exchange is Asia’s leading and trusted market infrastructure, facilitating the exchange of capital and ideas to create value for people, businesses and economies. As a multi-asset exchange operating equity, fixed income and derivatives markets to the highest regulatory standards, SGX is a vertically integrated business that provides listing, trading, clearing, settlement, depository and data services.

With about 40% of listed companies and over 80% of listed bonds originating outside of Singapore as well as established linkages across the region and in Europe, SGX is Asia’s most international and connected exchange. Offering a full suite of derivatives products across Asian equity indices, commodities and currencies, SGX is the world’s most liquid international market for the benchmark equity indices of China, India, Japan and ASEAN.

As Asia’s pioneering central counterparty, SGX is globally recognised for its risk management and clearing capabilities, and was one of the first globally to adopt the Principles for Financial Market Infrastructure.

Headquartered in AAA-rated Singapore, SGX has over 800 employees including offices in Beijing, Chicago, Hong Kong, London, New York, Mumbai, San Francisco, Shanghai and Tokyo.

Asia’s leading multi-asset exchange

SGX Market Strategist, Equity & Fixed Income, Singapore Exchange Ltd (SGX)

Geoff Howie

SGX Market Strategist, Equity & Fixed Income

Equity Bottom-Up

Samudera Shipping Line / Equity Bottom-Up

<!DOCTYPE html PUBLIC "-//W3C//DTD HTML 4.0 Transitional//EN" "http://www.w3.org/TR/REC-html40/loose.dtd">
<html><body>
<ul>
<li>
Crude oil prices gained c. 61% since Dec ‘21 to multi-year highs (&gt;US$100/bbl) on the back of geopolitical tensions and stronger economy recovery from COVID-induced slowdown. Maritime and Offshore Services (MOE) companies have experienced improving near-term industry outlook on the back of the oil rally and also increased shipping demand. 
	 </li>
	<li>
While SGX MOE companies are benefitting from near-term tailwinds, many of them are also pivoting to clean and renewable energy related businesses, as part of their longer-term strategies. Opportunities seen in LNG and offshore renewables such as windfarms. 
	 </li>
	<li>The top 10 most actively traded MOE companies posted YTD average total returns of +20.6% (vs. the STI’s +7.9%), building on the average of +53.5% seen in 2021. </li>
</ul>
 

Since December 2021, WTI crude oil has saw a gain of nearly 61% to multi-year highs on the back of geopolitical tension in Eastern Europe impacting supply and stronger economy recovery from a COVID-induced slowdown. While the International Energy Agency (IEA) and the Organization of the Petroleum Exporting Countries (OPEC) have both revised down global crude oil demand projects, prices have remained above US$100/bbl in recent trading sessions. 
Singapore is an International Maritime Centre a global offshore and marine hub and is expected to grow in tandem with increasing global demand for clean and renewable fuel (e.g. diversification into liquefied natural gas (LNG) and offshore renewables). 
SGX is also one of the largest clusters of Maritime and Offshore Services (MOE) companies in Asia Pacific. The sector is diverse with sub-segments ranging from business trusts, energy, offshore services, shipping and shipyards.
</body></html>

<figure>
 <img src='https://api2.sgx.com/sites/default/files/2022-04/Capture%201_1.PNG' alt='oil price returned 61% since December 2021' />
 </figure>
 <div class='content-caption'>oil price returned 61% since December 2021</div>
<!DOCTYPE html PUBLIC "-//W3C//DTD HTML 4.0 Transitional//EN" "http://www.w3.org/TR/REC-html40/loose.dtd">
<html><body>Source: Bloomberg. As of 21 April 2022. Oil prices from WTI crude oil contract</body></html>

<figure>
 <img src='https://api2.sgx.com/sites/default/files/2022-04/Capture_10.PNG' alt='Top 10 Active MOE Stocks Outperforming Broader Index' />
 </figure>
 <div class='content-caption'>Top 10 Active MOE Stocks Outperforming Broader Index</div>
<!DOCTYPE html PUBLIC "-//W3C//DTD HTML 4.0 Transitional//EN" "http://www.w3.org/TR/REC-html40/loose.dtd">
<html><body>
Source: Bloomberg, Refinitiv. As of 21 April 2022 
 

The 10 most actively stocks in the MOE sector outperformed the broader FTSE Straits Times Index (+7.9%) with an average total returns of +20.6% in the YTD, building on the +53.5% returns seen in 2021. Rising crude oil prices and buoyant freight rates continue to be near-term drivers for the sector. Pivoting into green energy 
While the sector continues to be governed by crude oil price movements in the near-term, companies have been pivoting into renewables as global demand for clean energy grows rapidly. A common theme in this space is the shift to greener solutions such as green vessels, offshore windfarms and solar. 
Below are some examples (not-exhaustive) of the pivots some companies have done: Yangzijiang Shipbuilding – Committed to develop strategic growth in LNG-related capabilities and shift towards net-zero emissions and shipping carbonisation. The company currently has R&amp;D centres in China focusing on green vessel technology and will be setting up an advanced maritime R&amp;D centre in Singapore to focus on areas such as green vessel technologies as well as autonomous vessels, cyber- physical simulations, digital twinning and advanced low latency communication systems. Keppel Corp – In line with the company’s Vision 2030, which puts sustainability at the core of the Group’s strategy, business units have seized opportunities in renewable energy such as solar and offshore wind. For example, Keppel hopes to grow renewables portfolio to 7 gigawatts by 2030, with hopes to achieve it by 2025 (source Business Times). The group is also part of a consortium which is acquiring a majority stake in a solar platform (Cleantech Renewable Assets) to accelerate its growth in this space. Sembcorp Marine – The company aims to grow sustainable solutions (covering gas, renewables and cleaner energy) to 40% of its overall revenue by 2030 (currently 30% as of FY2021). Sembcorp Marine recently, via its subsidiary, secured a contract to construct a Wind Turbine Installation Vessel (WTIV) based on its in-house design in collaboration with the customer. Kim Heng – Pivoted away from oil and gas sector since 2014 and focuses now on offshore windfarm renewables. Company is leveraging on its capabilities, experience and track record in the oil and gas sector to reapply them to renewable energy and marine construction. The company intends to look for opportunities in offshore windfarm renewables segment and expects more contract wins in renewable energy. Read more in the 10 August 2021 edition of SGX Research 10 in 10 report. Marco Polo Marine – The company has been diversifying its customer base beyond the oil &amp; gas sector, with some of its vessels now supporting construction of offshore windfarm projects in Taiwan. Close to 20% of its currently utilized vessels are working on offshore windfarm projects, with contribution to its financial performance. Aside from this, Marco Polo intends to support the operation and maintenance of offshore windfarms after they are built. Read more in the 13 July 2021 edition of SGX Research 10 in 10 report.

<table class="table table-striped"><tbody>
<tr>
<td>
			10 most actively traded stocks in the MOE sector
			</td>
			<td>
			Code
			</td>
			<td>
			Mkt Cap S$M
			</td>
			<td>
			12M Daily Traded Value 

			(S$M)
			</td>
			<td>
			2022 YTD 

			total returns %
			</td>
			<td>
			2021 

			total returns %
			</td>
			<td>
			1Y 

			total returns %
			</td>
		</tr>
<tr>
<td>
			Yangzijiang Shipbuilding
			</td>
			<td>
			BS6
			</td>
			<td>
			6,084
			</td>
			<td>
			35.4
			</td>
			<td>
			14.9
			</td>
			<td>
			44.6
			</td>
			<td>
			15.8
			</td>
		</tr>
<tr>
<td>
			Keppel Corp
			</td>
			<td>
			BN4
			</td>
			<td>
			11,973
			</td>
			<td>
			19.7
			</td>
			<td>
			29.9
			</td>
			<td>
			-1.5
			</td>
			<td>
			29.6
			</td>
		</tr>
<tr>
<td>
			Sembcorp Marine
			</td>
			<td>
			S51
			</td>
			<td>
			3,861
			</td>
			<td>
			11.8
			</td>
			<td>
			50.0
			</td>
			<td>
			-34.1
			</td>
			<td>
			-31.1
			</td>
		</tr>
<tr>
<td>
			Hutchison Port Holdings*
			</td>
			<td>
			NS8U
			</td>
			<td>
			2,853
			</td>
			<td>
			2.6
			</td>
			<td>
			11.0
			</td>
			<td>
			22.8
			</td>
			<td>
			10.3
			</td>
		</tr>
<tr>
<td>
			Samudera Shipping Line
			</td>
			<td>
			S56
			</td>
			<td>
			550
			</td>
			<td>
			1.1
			</td>
			<td>
			78.9
			</td>
			<td>
			138.4
			</td>
			<td>
			238.5
			</td>
		</tr>
<tr>
<td>
			Kim Heng
			</td>
			<td>
			5G2
			</td>
			<td>
			64
			</td>
			<td>
			0.6
			</td>
			<td>
			15.4
			</td>
			<td>
			143.8
			</td>
			<td>
			136.8
			</td>
		</tr>
<tr>
<td>
			Marco Polo Marine
			</td>
			<td>
			5LY
			</td>
			<td>
			106
			</td>
			<td>
			0.4
			</td>
			<td>
			11.1
			</td>
			<td>
			107.7
			</td>
			<td>
			50.0
			</td>
		</tr>
<tr>
<td>
			Civmec
			</td>
			<td>
			P9D
			</td>
			<td>
			327
			</td>
			<td>
			0.3
			</td>
			<td>
			-0.7
			</td>
			<td>
			69.6
			</td>
			<td>
			22.9
			</td>
		</tr>
<tr>
<td>
			Mermaid Maritime
			</td>
			<td>
			DU4
			</td>
			<td>
			106
			</td>
			<td>
			0.2
			</td>
			<td>
			0.0
			</td>
			<td>
			11.9
			</td>
			<td>
			10.3
			</td>
		</tr>
<tr>
<td>
			Ausgroup
			</td>
			<td>
			5GJ
			</td>
			<td>
			68
			</td>
			<td>
			0.2
			</td>
			<td>
			-4.3
			</td>
			<td>
			9.5
			</td>
			<td>
			-24.1
			</td>
		</tr>
<tr>
<td>
			Average
			</td>
			<td>
			 
			</td>
			<td>
			 
			</td>
			<td>
			 
			</td>
			<td>
			20.6
			</td>
			<td>
			53.5
			</td>
			<td>
			45.9
			</td>
		</tr>
</tbody></table>
Source: SGX, Refinitiv, Bloomberg (Data as of 21 April 2022)

*HPHT returns in USD
</body></html>





Crude oil prices gained c. 61% since Dec ‘21 to multi-year highs (&gt;US$100/bbl) on the back of geopolitical tensions and stronger economy recovery from COVID-induced slowdown. Maritime and Offshore Services (MOE) companies have experienced improving near-term industry outlook on the back of the oil rally and also increased shipping demand. 
	 
	
While SGX MOE companies are benefitting from near-term tailwinds, many of them are also pivoting to clean and renewable energy related businesses, as part of their longer-term strategies. Opportunities seen in LNG and offshore renewables such as windfarms. 
	 
	The top 10 most actively traded MOE companies posted YTD average total returns of +20.6% (vs. the STI’s +7.9%), building on the average of +53.5% seen in 2021. 

 

Since December 2021, WTI crude oil has saw a gain of nearly 61% to multi-year highs on the back of geopolitical tension in Eastern Europe impacting supply and stronger economy recovery from a COVID-induced slowdown. While the International Energy Agency (IEA) and the Organization of the Petroleum Exporting Countries (OPEC) have both revised down global crude oil demand projects, prices have remained above US$100/bbl in recent trading sessions.  
Singapore is an International Maritime Centre a global offshore and marine hub and is expected to grow in tandem with increasing global demand for clean and renewable fuel (e.g. diversification into liquefied natural gas (LNG) and offshore renewables).  
SGX is also one of the largest clusters of Maritime and Offshore Services (MOE) companies in Asia Pacific. The sector is diverse with sub-segments ranging from business trusts, energy, offshore services, shipping and shipyards.



      
    
    oil price returned 61% since December 2021

Source: Bloomberg. As of 21 April 2022. Oil prices from WTI crude oil contract


      
    
    Top 10 Active MOE Stocks Outperforming Broader Index


Source: Bloomberg, Refinitiv. As of 21 April 2022 
 

The 10 most actively stocks in the MOE sector outperformed the broader FTSE Straits Times Index (+7.9%) with an average total returns of +20.6% in the YTD, building on the +53.5% returns seen in 2021. Rising crude oil prices and buoyant freight rates continue to be near-term drivers for the sector.  Pivoting into green energy  
While the sector continues to be governed by crude oil price movements in the near-term, companies have been pivoting into renewables as global demand for clean energy grows rapidly. A common theme in this space is the shift to greener solutions such as green vessels, offshore windfarms and solar.  
Below are some examples (not-exhaustive) of the pivots some companies have done:  Yangzijiang Shipbuilding – Committed to develop strategic growth in LNG-related capabilities and shift towards net-zero emissions and shipping carbonisation. The company currently has R&amp;D centres in China focusing on green vessel technology and will be setting up an advanced maritime R&amp;D centre in Singapore to focus on areas such as green vessel technologies as well as autonomous vessels, cyber- physical simulations, digital twinning and advanced low latency communication systems.  Keppel Corp – In line with the company’s Vision 2030, which puts sustainability at the core of the Group’s strategy, business units have seized opportunities in renewable energy such as solar and offshore wind. For example, Keppel hopes to grow renewables portfolio to 7 gigawatts by 2030, with hopes to achieve it by 2025 (source Business Times). The group is also part of a consortium which is acquiring a majority stake in a solar platform (Cleantech Renewable Assets) to accelerate its growth in this space.  Sembcorp Marine – The company aims to grow sustainable solutions (covering gas, renewables and cleaner energy) to 40% of its overall revenue by 2030 (currently 30% as of FY2021). Sembcorp Marine recently, via its subsidiary, secured a contract to construct a Wind Turbine Installation Vessel (WTIV) based on its in-house design in collaboration with the customer.  Kim Heng – Pivoted away from oil and gas sector since 2014 and focuses now on offshore windfarm renewables. Company is leveraging on its capabilities, experience and track record in the oil and gas sector to reapply them to renewable energy and marine construction. The company intends to look for opportunities in offshore windfarm renewables segment and expects more contract wins in renewable energy. Read more in the 10 August 2021 edition of SGX Research 10 in 10 report.  Marco Polo Marine – The company has been diversifying its customer base beyond the oil &amp; gas sector, with some of its vessels now supporting construction of offshore windfarm projects in Taiwan. Close to 20% of its currently utilized vessels are working on offshore windfarm projects, with contribution to its financial performance. Aside from this, Marco Polo intends to support the operation and maintenance of offshore windfarms after they are built. Read more in the 13 July 2021 edition of SGX Research 10 in 10 report.




			10 most actively traded stocks in the MOE sector
			
			
			Code
			
			
			Mkt Cap S$M
			
			
			12M Daily Traded Value 

			(S$M)
			
			
			2022 YTD 

			total returns %
			
			
			2021 

			total returns %
			
			
			1Y 

			total returns %
			
		


			Yangzijiang Shipbuilding
			
			
			BS6
			
			
			6,084
			
			
			35.4
			
			
			14.9
			
			
			44.6
			
			
			15.8
			
		


			Keppel Corp
			
			
			BN4
			
			
			11,973
			
			
			19.7
			
			
			29.9
			
			
			-1.5
			
			
			29.6
			
		


			Sembcorp Marine
			
			
			S51
			
			
			3,861
			
			
			11.8
			
			
			50.0
			
			
			-34.1
			
			
			-31.1
			
		


			Hutchison Port Holdings*
			
			
			NS8U
			
			
			2,853
			
			
			2.6
			
			
			11.0
			
			
			22.8
			
			
			10.3
			
		


			Samudera Shipping Line
			
			
			S56
			
			
			550
			
			
			1.1
			
			
			78.9
			
			
			138.4
			
			
			238.5
			
		


			Kim Heng
			
			
			5G2
			
			
			64
			
			
			0.6
			
			
			15.4
			
			
			143.8
			
			
			136.8
			
		


			Marco Polo Marine
			
			
			5LY
			
			
			106
			
			
			0.4
			
			
			11.1
			
			
			107.7
			
			
			50.0
			
		


			Civmec
			
			
			P9D
			
			
			327
			
			
			0.3
			
			
			-0.7
			
			
			69.6
			
			
			22.9
			
		


			Mermaid Maritime
			
			
			DU4
			
			
			106
			
			
			0.2
			
			
			0.0
			
			
			11.9
			
			
			10.3
			
		


			Ausgroup
			
			
			5GJ
			
			
			68
			
			
			0.2
			
			
			-4.3
			
			
			9.5
			
			
			-24.1
			
		


			Average
			
			
			 
			
			
			 
			
			
			 
			
			
			20.6
			
			
			53.5
			
			
			45.9
			
		

Source: SGX, Refinitiv, Bloomberg (Data as of 21 April 2022)

*HPHT returns in USD



SG Maritime and Offshore Plays Pivoting to Clean Energy and Renewables