SINGAPORE (Aug 24): Six funds available for sale in Singapore own shares in struggling oil and gas producer KrisEnergy, which has slumped 36% this year. Low crude oil prices, which are trading almost 60% less than mid-2014, have weighed on the company’s earnings and shares. But funds holding KrisEnergy might not be badly affected as their exposure to the stock is less than 1% of assets, according to data from Morningstar Direct.

On Aug 14, SGX-listed KrisEnergy announced a US$25.2 million (S$33.8 million) net loss for 2QFY2016 compared to a US$9.6 million profit a year earlier. In June this year, KrisEnergy transferred a US$108.3 million revolving credit to DBS Group, Singapore’s largest lender. Singapore’s three biggest banks all have exposure to the oil and gas sector, with DBS the highest at S$23 billion or nearly 8% of total loans.

(See Which funds have the largest exposure to DBS?)

The fund most exposed to KrisEnergy is the S$762 million Aberdeen SP Singapore Equity, a Singapore-focused fund. The Aberdeen fund’s 0.64% direct holding in KrisEnergy (as at Mar 31) is minor. However, indirect exposure is fairly significant as DBS is the fund’s second largest holding at 9% of assets. DBS has fallen 7.2% this year. Nevertheless, the Aberdeen fund has gained 4.2% ytd, beating the 2% return of Singapore’s benchmark Straits Times Index.

Meanwhile, the largest fund holding KrisEnergy is the team-managed S$2 billion Capital International Emerging Markets fund, which has gained 8.9% this year. However, the Capital International fund has nearly 200 holdings (as at April 30), with KrisEnergy making up only 0.07% of total assets. As such, the stock’s performance is unlikely to have a huge impact on the fund.

Jeffrey S. MacDonald, Interim Chief Executive Officer of KrisEnergy, said, “In the near term, there is a risk that certain of our covenants under existing debt instruments may come under stress.” KrisEnergy’s woes come less than a month after Swiber Ltd shocked markets by saying it would wind itself up. The company subsequently changed tack by opting instead for judicial management. DBS has since disclosed it has S$721 million of exposure to Swiber.