Keppel is moving towards an asset-light model where the capital is recycled into new projects. In June, Keppel announced the proposed divestment of a 50% stake in Marina East Water (MEW), which owns the Keppel Marina East Desalination Plant, to Keppel Infrastructure Trust. The plant will continue to be operated by Keppel units.
In the past 20 years, real estate like offices, malls, warehouses and hospitals have been securitised, and the proceeds recycled or distributed. However, two Singapore conglomerates are leading the way in monetising infrastructure, supporting their share prices. The chart pattern shows Keppel Corp is on a tear and moving inexorably upwards. The negative divergences developing with short-term RSI may cause a temporary blip in the uptrend, but it is unlikely to cause a significant correction. Any decline will likely meet with support at the 50- day moving average of $7. The 50- and 100-day moving averages drew together mid-August before continuing upwards. The immediate resistance is $8.63. Keppel traded above $12 before the global financial crisis. During the oil and gas rally from 2011 to 2014, Keppel tested $11 several times.
This year, Keppel’s revenue and earnings profile are markedly different from 2011 during the oil and gas upswing. At that time, Keppel was the world’s largest jack-up rig builder, a capital goods company. Now, Keppel is focused on green energy, not fossil fuels, despite Petrobras’s US$2.9 billion ($4.07 billion) contract for a Floating Production, Storage and Offloading vessel (FPSO).
