Hot stock: Keppel climbs as much as 21.3% as shares trade ex-distribution; Sembmarine falls

KEPPEL Corporation jumped as much as 21.3 per cent during morning trade on Thursday (Feb 23), after its shares started trading on an ex-distribution basis.

This meant those who buy the stock from that date will no longer be entitled to the distribution in specie of 19.1 Sembcorp Marine (Sembmarine) shares per Keppel share held.

Keppel’s counter was trading as much as S$1.019 higher at S$5.80 as at 9.44 am, which is 21.3 per cent higher than its adjusted closing price of S$4.781 on Wednesday. By 10.33 am, Keppel’s shares were up 18 per cent at S$5.64, with 12.9 million shares changing hands.

Shares of Sembmarine, meanwhile, fell as much as 5.2 per cent to S$0.127 as at 10.24 am. By 10.33 am, it was trading 4.5 per cent lower at S$0.128, with 269.2 million shares traded, making it one of the most heavily traded counters by volume.

The completion of the merger of Keppel Offshore & Marine and Sembmarine is fast approaching. On Feb 28, Keppel will receive 54 per cent or 36.8 billion shares of Sembmarine with a total implied value of about S$4.5 billion.

However, as Keppel is distributing the bulk of those shares to its shareholders, and the implied value of the distribution is S$4.1 billion, Keppel’s net tangible assets will fall.

The Business Times reported on Wednesday that the deal between Keppel and Sembmarine appears to have attracted the attention of short sellers. Short positions on Keppel have increased slightly in recent days, while short interest in Sembmarine was up significantly.