Brokers' take

Sembcorp Marine | Hold Target price: S$1.43 Dec 14 close: S$1.495 OCBC Investment Research, Dec 14

Since our downgrade to sell in Oct 2015, Sembcorp Marine's (SMM) share price has corrected by about 40 per cent, compared to the STI's 3 per cent drop over the same period. At current price level, the stock is trading at about 1.2x book, which is not considered low compared to other oil and gas-related counters, but low compared to SMM's historical stock performance.

The stock has been one of the most shorted counters, driving up borrowing costs for short sellers. With news that Opec (and more recently non-Opec countries too) are seeking to cut oil production, oil prices have rebounded. We think that sentiment on oil may …