The Swiber collapse put a possible dent of $350 M into DBS after secured. Unsecured asset to me doesn't mean no value, just much lesser especially during a poor market condition. Even then, I am surprise the total loan exposure is in the tune of $700 M. In my previous reading just 2 weeks ago on Q1 DBS result, it has a profit on $1.234 B. It has an allowance in the report of $170 M.
If is a one-off thing, it could a good thing to buy on dip. However is it ? DBS has to put it whole segment of this portfolio under review again. Q2 may be exciting to read if they allow !
Another question in my mind is whether the Market has fully downgrade Banking from last year level. If so, what we are seeing now is just market sentiments. What we do know is that Oil Price doesn't look like recovering anytime soon. Shale Oil is there as check and balance to the "Evil Cartel". To put it simply, Shale Oil could possibly be the product of QEs. An industry build up from debts and more debts. And once is build up, it put a lid on the cartel every time the oil price attempt to go up.
What this simply mean is that it is going to be a long winter for the oil and gas industry. Question is how long ? For a start, the cost structure as i mentioned previously is not right for the industry. They need to re-size their cost not just the headcount. Anyone want to order offshore rig must be insane. Are we hoping Keppel and SBM at the mean time be able to do an "Apple Magic" ? Supporting industry like MTQ has a strategy to buy time while company like Swiber attempted a too big to fail stunt.
During this time who will benefits from low oil price ? Start thinking.
Cory
20160731
If is a one-off thing, it could a good thing to buy on dip. However is it ? DBS has to put it whole segment of this portfolio under review again. Q2 may be exciting to read if they allow !
Another question in my mind is whether the Market has fully downgrade Banking from last year level. If so, what we are seeing now is just market sentiments. What we do know is that Oil Price doesn't look like recovering anytime soon. Shale Oil is there as check and balance to the "Evil Cartel". To put it simply, Shale Oil could possibly be the product of QEs. An industry build up from debts and more debts. And once is build up, it put a lid on the cartel every time the oil price attempt to go up.
What this simply mean is that it is going to be a long winter for the oil and gas industry. Question is how long ? For a start, the cost structure as i mentioned previously is not right for the industry. They need to re-size their cost not just the headcount. Anyone want to order offshore rig must be insane. Are we hoping Keppel and SBM at the mean time be able to do an "Apple Magic" ? Supporting industry like MTQ has a strategy to buy time while company like Swiber attempted a too big to fail stunt.
Cory
20160731
Wow! So many rotten eggs will be dug out one by one ! So scary ! It will be much more shock news from now onwards ,,,😱😱 more to come ??
ReplyDeleteDun bluff. Waiting for Crisis to hoot right ? :P
DeleteHaha! U are right ! Crisis investing always a good strategy ! 😃😃👏🏽👏🏽
Deleteyes, cory
ReplyDeletewho benefit from low oil price?
You are only allow to steal my line once dear. :)
Delete