SembMarine shares slide but brokers unfazed by 'knee-jerk reaction'

SembMarine shares slide but brokers unfazed by 'knee-jerk reaction'
Above photo is All work on the affected rig has stopped since the accident on Monday morning at Jurong Shipyard. MOM officers are investigating the accident in which 89 workers were injured.

SINGAPORE - SEMBCORP Marine shares fell yesterday in what some brokers called a "knee-jerk reaction" following a serious accident at its Jurong Shipyard on Monday.

The stock fell eight cents, or 1.8 per cent, to $4.38 with some 15.1 million shares changing hands.

It was the second day of decline for SembMarine after a 2.2 per cent fall on Monday.

All work at the affected rig has been stopped following the Monday morning accident, in which 89 workers were injured, while Ministry of Manpower (MOM) officers investigate.

The Straits Times understands that it is work as usual on all other rigs at Jurong Shipyard.

Brokers and analysts were not perturbed by the incident, arguing that SembMarine's fundamentals remain intact.

"The sell-off is more of a knee-jerk reaction to the news," said remisier Desmond Leong.

"I don't think the accident will change the fundamentals much. At the most, there could be possible delays in the delivery of the rig, but it won't be something they cannot rectify."

SembMarine shares had risen almost 11 per cent since the middle of last month before this week's losses hit.

Maybank Kim Eng Research analyst Yeak Chee Keong said he is "not making changes as of now" to his "buy" call and $5.60 target price on the stock.

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