Sembcorp Marine Ltd. has gained almost S$2 billion ($1.5 billion) in just three weeks making its parent Singapore’s best-performing stock in the past month as investors and analysts became more optimistic on the prospect of a potential surge in new orders amid rising oil prices.
The company, which is majority-owned by Sembcorp Industries Ltd., has received at least three rating upgrades from research firms this year. UBS AG and Nomura Singapore Ltd. upgraded the stock’s recommendation to buy this year, and OCBC Investment Research raised its rating to a hold from sell. Target prices from all three firms are sitting well above the 12-month average of S$2.12 from 20 analysts, according to data compiled by Bloomberg.
Credit Suisse Group AG’s Gerald Wong said in a Jan. 15 report that the company’s management was optimistic about new orders and debt reduction in recent investor meetings, while Nomura called the company’s strategy a “turnaround story” in its Jan. 19 upgrade. This was followed by a bullish note by DBS on Jan. 22 and an upgrade by UBS on Jan. 23 for similar reasons.
January also saw more institutional buyers than sellers with funds including Deutsche Bank AG and BlackRock Inc. boosting their stakes in the company, Bloomberg data show.
Sembcorp Marine surged 52 percent this year, the second-best performer on the FTSE ST All Share Index that tracks almost all stocks traded in the city-state’s main board.
What’s the next catalyst for Sembcorp Marine? Earnings. It’s expected to report full-year financial results on Feb. 21 and its 61 percent owner Sembcorp Industries will report the next day.