We wake up over the weekend of the
drone attack on Saudi Arabia .
Oil prices are up by more than 10%.
How does it affect the oil related counters in Singapore?
I am using three stocks that are proxy to oil movements.
- Keppel Corporation
- Sembawang Corporation
- Sembawang Marine
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| Keppel Corporation Stock chart |
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| Sembawang Corporation Stock chart |
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| Sembmarine stock chart |
Interesting to note that Sembmarine and SembCorp are trading at the year lows. Keppel appears to have recovered a bit.
One the first hour of the Monday trading day, all these stocks shot up by more than 2% with Sembmarine perforrming the best, while SembCorp performing the "worse".
I was tempted to take a small position in one of the three stocks that prompted me to sit down and write this post. I was tempted to run the stocks numbers through a robo algorithm. But given the macro situation of uncertainty, I decided not to do so due to outliers.
It is almost two hours into the trading day.
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| Sembcorp stock chart - 5 mins intervals |
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| Keppel stock chart - 5 mins intervals |
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Sembmarine stock chart - 5 mins interval
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All three stocks appears to have settle down from the initial opening trade phenomenon reaction to the news.
Sembmarine shot up to 1.33 from 1.29 opening and now at 1.31. It is up by a nice 3% margin.
Sembcorp shot up to 2.27 from 2.22 opening and now at 2.23 which is almost flat for the moment.
Keppel shot up to 6.36 from 6.26 opening and now at 6.29. It is up by 1.1% margin.
It appears that Sembcorp has settle down in steady stead while Sembmarine are Keppel are still oscillating. Volumes are high among three of these stocks. Likely to be profit taking among some traders to lock in profits till the situation is clearer. You can also see many are jumping onto the bandwagon too.
On the macro front, it appears that USA may take action against Iran that will further de-stabilize the market.
The overall STI is slighlty down though recovered slightly.
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| STI chart for the morning |
Looking at the fundamentals of these three companies
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| Keppel, Sembcorp, Sembmarine valuations |
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| Keppel , Sembcorp, SembMarine Company financials |
Look at the dividends, Keppel is paying a much higher. Well, I should have bought Keppel when it is below $6. It is still quite attractive now despite the 30 cents premium over at $6 given the dividend.
Keppel appears to be generate more profit than SembCorp despite of the lower revenue top line. Debt is also much lower than SembCorp.
Keppel appears to be well flavored by analyst despite all have potential upside. Sembcorp has lots of negative reports.
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| Keppel stock price analysts consensus |
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| SembCorp stock price analysts consensus |
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| SembMarine stock price analysts consensus |
Parring from any new major events, it appears that this is more of a blip. The loss of oil from Saudi Arabia seems to have compensated by USA releasing its reserve to stabilize the price of oil.
In my view, oil prices will stabilize for a couple of days for now.......
Let's see how it goes. I may have missed an opportunity to pick up some cheap stocks but the problem is fundamentally the Sembcorp and Sembmarine stocks have issues than the current price of oil to bring it out of the woods.
Please see my
Disclaimer notes in the blog.
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