High Dividend Plays In The Limelight
Amidst the global uncertainty over the Eurozone crisis and the slow economic recovery in the United States, investors are turning to high dividend yield stocks. Business Times noted that the telecommunications sector performed the best between 30 April and 19 June 2012, with the FTSE ST Telecommunications Index rising 2.4 percent. The FTSE ST Real Estate Investment Trusts (REITs) performed well too, coming in third place dropping a mere 0.4 percent as compared to a 4.6 percent dip in the Straits Times Index. Technology stocks in the index outran the broader market rising 0.8 per cent in that period, coming in second on the list. OCBC Investment Research believes that high dividend yield stocks will continue to be in the spotlight, giving an “Overweight” rating on the telecommunications and REITs sector.
Significance: OCBC picks Cache Logistics Trust on its resilient portfolio with earnings visibility, CDL Hospitality Trusts on its low gearing among S-REITs with strong financial position and M1 on its focus on niche segments with opportunities from the roll-out of the Next-Generation Nationwide Broadband Network. All stocks have estimated dividend yields ranging 5.9 to 8 percent for FY12.
Keppel Offshore & Marine’s Unit To Deliver Ukraine’s Second Jackup Rig
Keppel FELS, a wholly-owned unit of Keppel Offshore & Marine, is on track to deliver Ukraine’s second KFELS B Class jackup rig ahead of schedule, within budget and with a perfect safety record to be deployed on the Ukrainian shelf of the Black Sea for its owner Chernomornaftogaz. This follows the redelivery of its first jackup rig of the same design in Ukraine earlier in May. These two rigs will be Ukraine’s most advanced rigs, capable of operating in water depths of 120 metres denied to the two decades-old jackups the country owns. Notably, chairman of Naftogaz, parent company of Chernomornaftogaz, said the firm plans to order a semi-submersible rig from Keppel FELS that will add to its capabilities in exploration and production. The rigs will treble Ukraine’s offshore gas production.
Significance: Ukraine is growing rapidly and the country is keen to further develop its oil and gas reserves, signalling plans for more orders. Keppel FELS notes that there are currently another 19 of its B Class jackups on order, reflecting the strength of its design.
Nam Cheong Awarded US$130m Order From Bumi Armada
Malaysian-based leading offshore support vessel shipbuilder, Nam Cheong, announced that is subsidiary, Nam Cheong Dockyard has been awarded a letter of intent from Bumi Armada Navigation for the sale of four multi-purpose platform supply vessels (MPSVs) with the option to build four additional units. The contract value, at approximately US$130 million, is one of the company’s largest wins. The vessels are scheduled for delivery between 2Q14 to 2Q15. Upon conclusion of the sale, Nam Cheong’s order book is expected to soar to RM874 million. Read more about Nam Cheong here.
Significance: The company’s order book has surpassed last year’s order book of RM638 million in just the first six months of this year and it is expected to contribute positively to its bottom line from FY12 to FY15.