Singapore banks, energy services stocks wobble following Ezra bankruptcy filing
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Singapore’s banks and a number of offshore oil and gas services companies in the Straits Times Index were off to a shaky start on Monday following the bankruptcy filing of one of their energy sector peers.
News that Ezra Holdings, an oilfield services group listed on the SGX, filed for bankruptcy in the US over the weekend, again shone the spotlight on Singapore’s oil and gas services sector, which has come under pressure as a drop in oil prices prompted producers to scale back capital expenditure.
Ezra has $1.5bn of total liabilities, with Singapore lender DBS facing the single biggest hit, with loans to Ezra of $272m. The bank said on Monday morning via a spokesman:
Our exposures to Ezra Holdings were moved to non performing in the third quarter, and suitable provisions have been made.
DBS was caught off-guard last summer by the rapid financial implosion of Swiber, another energy services company to which it was exposed.
Ezra also owes Oversea-Chinese Banking Corporation $184m. Shares in DBS were down 0.9 per cent, making it the fifth-worst performer in the 30-member Straits Times index, which was off 0.4 per cent. OCBC shares were down 0.4 per cent. A Singapore affiliate of HSBC is owed $108m.
United Overseas Bank, which is the country’s other main lender to the oil and gas services sector, was off 0.9 per cent.
Oilfield services companies in Singapore were also taking a knock. Among the major players, Sembcorp Industries was down 1.2 per cent, the index’s fourth-worst performer, and Keppel Corporation was off 0.6 per cent.