Sembcorp shares rise on ex-entitlements basis

Investors piled into shares of Sembcorp Industries on the counter's first day of trading excluding entitlements, while its marine arm's stock tumbled.

Yesterday, Sembcorp climbed to trade at $1.17 as at 11am, with 32.3 million shares changing hands, making it the second-most heavily traded by value on the Singapore bourse for the morning.

The counter closed yesterday at $1.17 with about 50.6 million shares traded.

Its latest price is 21.6 per cent above its theoretical price ex-entitlements of around 96.2 cents, calculated based on the stock's closing price of $1.91 on Tuesday.

The conglomerate on Monday said its shareholders would receive 4.911 Sembcorp Marine (SembMarine) shares for each Sembcorp share held.

Meanwhile, SembMarine tumbled 8.8 per cent to trade at 17.6 cents yesterday as at 11am. It recovered some ground to end the day 1.6 per cent lower at 19 cents.

The counter clocked the highest volume traded on the bourse, with about 209 million shares changing hands.

Shareholders last month gave the green light for SembMarine and its parent Sembcorp to proceed with their two-part proposal, which includes a demerger.

Analysts have said that Sembcorp now looks more attractive without SembMarine weighing it down, especially when evaluated against some of its peers.

Based on Sembcorp's closing price on Tuesday, the stock has gained 3.2 per cent since shareholders approved the demerger on Aug 11, and analysts are expecting more gains over the next 12 months. Nine of the 11 calls for Sembcorp are "buy" calls, according to Bloomberg data.

CGS-CIMB analyst Lim Siew Khee told The Business Times: "Relative to pure play power names, Sembcorp is more diversified and also operates in different markets in addition to a variety of products.

"It is not easy to compare them with regional peers but given that they are now considered as a purer play in the market, investors could start to give them that credit."

THE BUSINESS TIMES