For rig builders, the current oil slump may be worse than the Global Financial Crisis

Recovery will be longer this time around.

The current oil rout may prove more painful for local offshore players compared to the bloodbath of the Global Financial Crisis.

According to CIMB analysts Lim Siew Khee and Yeo Zhi Bin, the current oil slump bears more similarities with the GFC but recovery might be longer this time around.

"This cycle points toward a longer-drawn recovery. During GFC, big caps’ share prices rebounded by c.60% from the trough and small caps emerged as the best outperformer, mainly helped by the 80% recovery in oil prices. Today, although oil prices have bounced back by 30% from the trough, the market remains jittery over Singapore’s big- and small-cap O&M equities," they said.