Shares of Nam Cheong Ltd jumped as much as 15.4 percent after a broker highlighted the Singapore-listed offshore vessel builder could benefit from a boom in Malaysia's oil and gas sector.

Nam Cheong shares were up 10.3 percent at S$0.215, with more than 38.5 million shares traded. This was 7.1 times its average full-day volume traded over the last five sessions. The company's shares have surged 65 percent so far this year.

Amfraser initiated coverage of Nam Cheong with a buy rating and a target price of S$0.28, adding that the company was the largest offshore vessel builder in Malaysia, with an estimated 50-75 percent market share.

"(Nam Cheong) is positioned to ride the oil & gas up-cycle set in motion by Petronas' massive 5-year capex budget," Amfraser said in a report.

Last year, Malaysia's national oil company Petronas revised its 5-year capital expenditure target upwards to 300 billion ringgit ($97.5 billion).

Amfraser said although 2011 was a poor year for Nam Cheong, order wins have since recovered and it expects the company's earnings per share to jump by 56 percent this year.

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1033 (0233 GMT)

($1 = 3.0760 Malaysian ringgits)

(Reporting by Charmian Kok in Singapore; charmian.kok@thomsonreuters.com)