Chart of the Day: Check out Singapore rigbuilding kings' declining performance

They had underperformed STI.

According to Maybank Kim Eng, Singapore rigbuilders (Keppel Corp and SMM) have underperformed the STI by 3.1% and 7.7% respectively YTD, despite what we see as a sustained momentum of new order wins.

Expectations of declining margins and skepticism over the sustainability of the current rigbuilding cycle have capped share price performance.

Here's more from Maybank Kim Eng:

Among the two, SMM has been penalised more due to its quarterly margin disappointments last year and also a perceived higher level of risk in its drillship venture in Brazil.

Share price performance for Singapore rigbuilders has been capped due to persistent worries over margin contraction.

While we recognise the existence of such risk, we believe that the concern was overdone. We expect continual order wins, increasing rig prices and margin outperformance in 2013 to lead to moderation of such fears.

We urge accumulation during current stock weaknesses, ahead of the play out of our positive expectations