Yangzijiang Shipbuilding (Holdings) Ltd has
terminated a contract with Greek shipowner FreeSeas Ltd
after it failed to make payments, which may weigh on its stock
price, DBS Vickers said.
The cancelled contract was for Yangzijiang to build two bulk
carriers for FreeSeas, an external spokeswoman for the Chinese
Although the orders from FreeSeas account for only 1 percent
of Yangzijiang's $4.5 billion order book, "the cancellation will
still be negative on sentiment as this is Yangzijiang's first
contract cancellation on default," said DBS Vickers in a report.
It added that among the Singapore-listed shipyards, COSCO
Corp Singapore Ltd has the highest exposure to Greece
and Europe, with more than 60 percent of its order book from the
region, while Yangzijiang will be the least affected among
DBS advised investors to avoid COSCO's shares, which are
likely to underperform the market on concerns about their
At 0419 GMT, shares of Yangzijiang were unchanged at
S$1.045, while COSCO has fallen about 1 percent to S$0.995.
"We believe the cancellation is a reflection of tightening
in ship financing as European banks become more selective in
lending, while Chinese banks have not stepped in to fill the
gap," said Credit Suisse, which has an outperform rating and
target price of S$1.60 on Yangzijiang.
The brokerage estimates that only about 5 percent of
Yangzijiang's order book consists of bulk carrier orders from
1221 (0421 GMT)
(Reporting by Charmian Kok in Singapore;
11:07 STOCKS NEWS SINGAPORE-STX OSV shares up 3 pct on order
Shares of Singapore-listed shipbuilder STX OSV Holdings Ltd
rose as much as 3 percent after it won two contracts
worth 700 million Norwegian crowns ($118.1 million) to build two
platform supply vessels.
Shares of STX were up about 2 percent at S$1.55 at 0301 GMT
and have risen 34 percent so far this year.
"We believe that order momentum in the North Sea underscores
robust sector dynamics, despite ongoing Euro concerns," CIMB
The contracts bring the shipbuilder's order wins so far this
year to 6.7 billion Norwegian crowns, two-thirds of the broker's
total order target for fiscal 2012.
CIMB Research kept its target price of S$2.09 on STX OSV and
maintained its 'outperform' rating, saying it liked the company
for its high-end capabilities, market leadership and
entrenchment in Brazil.