Effective January 1, 2009, Mr Lim Chee Onn will relinquish his role as Chief Executive Officer of Keppel Corporation, but will continue to serve as non-executive Chairman. Mr Choo Chiau Beng, currently the CEO of Keppel Offsore and Marine (KOM) will assume the role of CEO for Keppel. Mr Tong Chong Heong, currently Managing Director and Chief Operating Officer of KOM, will be appointed CEO of the division. Mr Teo Soon Hoe is maintained in his role as Group Finance Director.

This brings to an end Mr Lim’s 9-year stewardship of Keppel. We do not see any major issues with Mr Choo’s succession, as he has proved himself extremely capable in the re-emergence of KOM during the last up-cycle. From a bigger picture perspective, the move hints that Mr Lim may be deployed to other areas, possibly outside of Keppel Corp, with other Singapore Government related entities - Temasek may take the opportunity to re-tool and re-organise the focus of Singapore Inc in the current economic climate.

There is no fundamental change to our outlook for Keppel Corporation. We retain our Hold recommendation with a target price of S$4.50, as we see no significant positive catalysts for the O&M or the property division in the near term.