Hot stock: Sembmarine trading volumes spike after new share issuance

SHARES of Sembcorp Marine (Sembmarine) experienced unusually high trading volumes on Wednesday (Mar 1) morning, after closing its combination with Keppel Offshore & Marine (Keppel O&M).

As at 9 am, the counter fell as much as S$0.012 or 9.4 per cent to S$0.115 with 47.2 million shares changing hands.

It later recovered to trade flat at S$0.127 as at the midday trading break. Some 915.1 million of the company’s shares were transacted, significantly above the average volume of 140.8 million.

No married deals were recorded in early trade, ShareInvestor data indicated.

In the second half of the trading day, the counter rose to as high as S$0.13, before dipping to S$0.123 at 4.32pm, according to data from the Singapore Exchange.

The stock recovered partly to as much as S$0.126, but crashed to its closing price of S$0.115, some 9.4 per cent or S$0.012 lower. About 2.9 billion shares worth a collective S$348.5 million changed hands over the course of the day.

Sembmarine’s volume surge comes after the company announced the close of its combination with Keppel O&M on Tuesday.

With the lifting of its trading halt on Wednesday morning, Sembmarine began trading at an enlarged total share capital, which includes roughly 36.8 billion Keppel O&M consideration shares issued directly to Keppel Corporation and its shareholders.

Excluding treasury shares, the total issued share capital of the company now stands at 68.2 billion shares, versus 31.4 billion shares previously. The Keppel O&M consideration shares represent 54 per cent of the total issued share capital of Sembmarine.

Sembmarine’s share price was observed to have declined amid a flurry of short-selling activity in the week, prior to the completion of its merger with Keppel O&M.

Analysts speculated that the sell-off mainly came from Keppel’s shareholders, who also owned shares in Sembmarine, on anticipation that active investors in Keppel would sell off their new Sembmarine shares once they have settled.