KepCorp, Sembmarine at risk of sell-offs after steady rebound

Blame it on Brazil woes.

Keppel Corp and Sembcorp Marine might be vulnerable to sell-offs following the rebound in their share prices in the past months, a report by CMC Markets revealed today.

According to a note from CMC Markets, there is a risk that these oil-related players are in for a retest of their December lows after having recovered some ground in the past three months.

“Not only have they rebounded the most, fresh news over a huge turnout at a political protest in Brazil could also lead to a reassessment of Keppel Corp’s close association to their key clients in Brazil, who are themselves embroiled in a corruption scandal. Sembcorp Marine, with their exposure to similar clients there, may also see selling pressure going forward,” stated CMC Markets.

The note further warned that year-to-date, neither Keppel nor Sembcorp’s Sembawang Shipyard have been successful in booking new orders with any significance or size.

“Furthermore, the current orders they have on hand may also prove vulnerable to cancellations due to the bleak outlook for oil. Both Ezion and Ezra have lost back almost their entire January rally and are languishing near their December lows,” CMC Markets noted.