Although we don’t believe in timing the market or panicking over market movements, we do like to keep an eye on changes – just in case they’re material to our investing thesis. The Straits Times Index (SGX: ^STI) is up by 0.4% to 3,304 points with 19 out of its 30 constituents logging gains. In comparison, only seven other blue chips had ended the day with losses. Let’s take a look at some market beaters both within and outside the index. Noble Group (SGX: N21) had risen by 1.8% to S$1.40. The company, which manages supply chains for…
Although we don’t believe in timing the market or panicking over market movements, we do like to keep an eye on changes – just in case they’re material to our investing thesis.
The Straits Times Index (SGX: ^STI) is up by 0.4% to 3,304 points with 19 out of its 30 constituents logging gains. In comparison, only seven other blue chips had ended the day with losses.
Let’s take a look at some market beaters both within and outside the index.
Noble Group (SGX: N21) had risen by 1.8% to S$1.40. The company, which manages supply chains for agricultural and energy products globally, revealed yesterday that it had formed a 75-25 joint venture with EIG Global Energy Partners.
Noble Group’s latest business partner specialises in making private investments in energy and energy-related infrastructure and manages US$15.4 billion worth of assets as of 31 March 2014. The joint venture, to be named Harbour Energy, Ltd, would “own and operate upstream and midstream energy assets globally.”
It is expected that Noble Group “will be preferred [sic] offtake and marketing partner” of the joint venture while EIG will be managing it and making acquisition decisions. Noble Group had agreed on 14 July 2014 to invest US$150 million into the venture with EIG pumping in US$50 million. With US$776 million in cash and short-term investments on hand at last count, it might not be too much of a stretch for Noble to come up with the required capital for Harbour Energy, Ltd.
Yusuf Alireza, Noble Group’s chief executive, had the following comments regarding the deal:
“The creation of Harbour Energy gives us the exciting opportunity of joining with an industry leader such as EIG to exploit the tremendous opportunities that the changing global energy markets are presenting. This transaction represents a significant milestone in the continued implementation of Noble’s “asset light” strategy, exploiting our best in class expertise in logistics and supply chain management, while partnering with market leading asset managers and owners.”
Fast growing offshore oil & gas support services provider Ezion Holdings (SGX: 5ME) has climbed by 2% to S$2.05. The company had been busy yesterday with it revealing that it had been approached with a letter of intent regarding a contract worth up to US$146 million over a five year period. If it gets pushed through, Ezion would deploy its service rig to work in Southeast Asian waters by the third quarter of 2016.
As I mentioned, Ezion had been busy on Tuesday because the company also announced that it has inked another contract worth US$122.6 million over seven years. Under the terms of the deal, Ezion would be sailing a service rig over to the North Sea to “support the oil & gas activities of an east European based national oil major.” The rig’s expected to be there by the second quarter next year.
Given that Ezion’s business for now is still focused on chartering its service rigs and technologically-advanced liftboats to support the activities of oil drillers, the ability to constantly win new contracts is key to the company’s success.
Vard Holdings (SGX: MS7) rounds up the trio with a 0.9% climb to S$1.07. The offshore vessel builder had revealed yesterday that it has secured a contract for the design and construction of a Platform Supply Vessel (PSV) for E.R. Offshore, a Germany-based offshore vessel owner. The vessel’s scheduled for delivery in the second quarter of 2016.
In a similar way to Ezion, companies like Vard depend on a constant flow of orders and it would be good for investors to keep an eye out on the company’s ability to win contracts.
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