Keppel and Sembcorp Marine shares plunge as oil prices slump

SINGAPORE — Keppel Corp and Sembcorp Marine shares yesterday fell to multi-year lows as investors dumped their holdings in the world’s two largest oil rig builders following a sustained plunge in global oil prices.

Keppel shares fell 1.2 per cent to close at S$8 each, the lowest close seen more than three years ago, when the counter ended at S$7.95 on Oct 11, 2011. It was the most actively-traded counter by value yesterday, with about 11.7 million shares worth S$92.9 million changing hands.

Shares in Sembcorp Marine lost 0.7 per cent to close at S$2.87 each, the lowest in about five-and-a-half years. The last time the stock was at this level was on July 22, 2009 when it closed at S$2.79. About 5.7 million shares worth S$16.5 million changed hands yesterday.

“Stocks of Keppel Corp and Sembcorp Marine are falling as investors cut exposure to the oil and gas sector due to slump in oil prices, which may lead to curtailment of offshore oil and gas activities and cuts in capex spending,” said Maybank Kim Eng analyst Yeak Chee Keong.

“We believe that negative sentiment would continue to weigh down on these stocks as long as oil prices remain volatile. Keppel Corp and Sembcorp Marine may face weak order win momentum in 2015,” he added.

Oil prices have plunged more than 40 per cent since June as United States production rose to the highest in three decades while growth in global demand slowed. Adding pressure on prices was the decision by the Organization of Petroleum Exporting Countries not to cut its 30-million-barrel-a-day output ceiling last month. ANGELA TENG