OREANDA-NEWS. West Texas Intermediate (WTI) Crude closed at US$50.18/bbl yesterday, bringing its one-month gain to 8.4%. Following Wednesday’s close, oil prices have rebounded 27% from the low of US$39.51/bbl seen on 2 August, and is now just 2% below the year-to-date high of US$51.23/bbl set in early June. The gains in crude were driven by news reports suggesting the Organization of Petroleum Exporting Countries (OPEC), with the support of Russia, has pledged to cut its production output to 32.5-33.0m barrels per day (bpd), a reduction of about 700,000 bpd. This has led to a rebound in the SGX Maritime & Offshore (MOE) Index, which has gained 12% since its lows of 299.56 in early September.

The SGX Maritime & Offshore (MOE) Index is a free-float, market capitalisation-weighted index that measures the performance of listed maritime and offshore companies in Singapore. It consists of 19 constituents with a combined market capitalisation of over S$27 billion. Constituents in the index include shipyard operators, shipping companies and companies providing offshore services. Index methodology information is provided below in the tables.

The five largest capitalised constituents in the SGX MOE Index have a combined market capitalisation of over S$25 billion. These companies traded at a market cap-weighted average price-to-earnings (P/E) ratio of 11.1x, price-to-book (P/B) ratio of 0.8x and maintain an average dividend yield of 5.3%. The five are categorised as Industrial Conglomerates, Machinery, and Transportation Infrastructure under the Global Industry Classification Standard (GICS®) industry definitions.

Raw Beta vs the Regional Benchmark

A raw beta coefficient of 1.00 indicates that the day-to-day price moves of the MOE constituents are largely in tandem with the regional benchmark, the MSCI Asia Pacific Ex Japan Energy Index. Of the 19 companies in the index, 12 or 63% of them have a raw beta coefficient of more than 1.00 relative to the MSCI Asia Pacific Ex Japan Energy Index, which means they theoretically have a higher volatility than the benchmark index. A higher beta coefficient suggests a stock may gain more against the benchmark as the sector recovers.