You are here

Hot stock: SembMarine up 5.5% at S$2.5 following late Monday selloff

marine.jpg
Sembmarine's shares have soared during trading on Tuesday with the oil and gas firm's stock price trading up S$0.13, or 5.5 per cent, at S$2.5 as at 10am.

SEMBMARINE'S shares have soared during trading on Tuesday with the oil and gas firm's stock price trading up S$0.13, or 5.5 per cent, at S$2.5 as at 10am.

This comes on the back of the company receiving a query from the Singapore Exchange over a 12 per cent fall in its stock price in the last 20 mins of trading hours on Feb 12.

SembMarine responded that it was not aware of any information or possible explanation for the unusual trading activities.

Following the selloff on Monday, DBS Equity Research maintained its "buy" rating on SembMarine and maintained its target price of $3.10 on Tuesday.

sentifi.com

Market voices on:

DBS noted that Norwegian petroleum conglomerate Statoil could announce this week its choice of contractor to provide the topside of floating production, storage and offloading (FPSO) vessel for its Johan Castberg development in the Barents Sea.

SembMarine, which secured the contract to build the hull and living quarters for the Castberg FPSO in December 2017; has also been involved in the bidding, and the prospect of SembMarine playing a role should not be ruled out, DBS said in its research note.

While industry sources emphasised that no outright winner has emerged for the work, Norway's Kvaerner appears to have the upper hand in getting the job of carrying out topside construction and integration management for the FPSO.

However, DBS cited that industry sources estimate that the topside construction and integration jobs, which could be worth more than US$1 billion, could be split into two awards, which may be good news for SembMarine.

Commenting on the stock's selloff on Monday evening, DBS maintained that the likelihood of a corruption scandal involving the oil and gas firm is low, the rights issue to augment balance sheet or the possibility of weak fourth-quarter earnings (due on Feb 21) are less likely to trigger such a selloff.

Powered by GET.comGetCom