SINGAPORE - Shares of Sembcorp Marine surged on Monday afternoon (Oct 21), prompting a query from the Singapore Exchange (SGX) on the stock's "unusual price movements".
The counter jumped as high as 11.6 per cent to $1.34 at 2.52pm. The query from the SGX came at 2.05pm, minutes after SembMarine's counter shot up 9.6 per cent to $1.315. The shares had closed flat at $1.20 on Friday.
SGX asked if the giant rigbuilder was aware of any information not previously announced which might explain the trading in its shares. It also asked the company to confirm its compliance with mainboard listing rules.
As of 4:01pm, shares of SembMarine were up 12.5 per cent while those of its parent, Sembcorp Industries, jumped 10.6 per cent
Sembcorp Marine's share surge came after news of Temasek Holdings' plans to raise its stake in Keppel Corp to 51 per cent with a $7.35-per-share offer through its wholly-owned subsidiary Kyanite Investment Holdings. Trading in Keppel's shares is currently halted.
KGI Securities analyst Joel Ng said in a note on Monday afternoon that if Temasek held a controlling stake in Keppel, a consolidation between two of Singapore's largest shipyards would be able to proceed. The probability of a merger between Keppel Offshore & Marine and Sembcorp Marine has also risen given the removal of the Sete Brasil overhang, he added.
Earlier this month, Keppel and Sembcorp Marine reached long-awaited settlements with Sete Brasil for oil rig-building contracts worth billions of dollars that were frozen after their once-biggest customer was forced to file for bankruptcy amid a sweeping corruption probe in Brazil.
"We believe Sembcorp Industries should be the biggest beneficiary of the current developments," said Mr Ng.