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Insider Trading
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sarahlkh
Senior |
23-Oct-2007 14:36
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pinnacle are u from jspl? i agree that if they are innocence, they would not sell cosco shares to cover backside :) |
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Pinnacle
Master |
23-Oct-2007 14:34
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Singapore's SembCorp Marine shares dive on forex loss SINGAPORE, Oct 23 (Reuters) - Shares in Singapore's SembCorp Marine The world's number two offshore oil-rig maker said late on Monday a finance executive allegedly undertook "unauthorised" foreign exchange transactions that could lead to an unrealised forex loss of $165 million, not including about $83 million already paid to a bank before the transactions were discovered. "Although the quantum of the losses represents 17.5 Singapore cents per SembCorp Marine share, investor confidence will be shaken," DBS Vickers analyst Jesvinder Sandhu said. "The uncertainty remains whether there could be more losses unearthed during the investigations." The company has appointed law firm Drew & Napier LLC jointly with accounting firm Ernst & Young to investigate the unauthorised transactions and to work with a special committee of SembCorp Marine's board, it said. Shares of SembCorp Marine fell as much as 17.9 percent to S$4.60, wiping out all gains made this month. The stock was down 15.7 percent by 0613 GMT. SembCorp Industries The size of the foreign exchange losses suggested they were too big to be only from hedging-related activity to cover future earnings and expenses, assuming the losses were incurred over a short time period, said a risk manager with a bank. SembCorp Marine did not provide more details on the extent or nature of the losses. In a separate statement, SembCorp Marine said it had sold part of its shareholding in shipbuilder Cosco Corp (Singapore) "We believe this to be an attempt by the group to mitigate the full brunt of the foreign exchange transactions," Merrill Lynch analyst Tse Wei Choo said. SembCorp Marine's trading losses were the largest reported in Singapore since 2004, when China Aviation Oil Corp SembCorp Marine said that Wee Sing Guan, director group finance, who is allegedly responsible for the forex deals, has been relieved of his duties at the firm and has also resigned from his directorships in the firm's subsidiaries. Morgan Stanley analyst Praveen K. Choudhary said that SembCorp Marine remains fundamentally strong, lifted by high oil prices, but the momentum for contracts would peak within the next 12 months as the cycle hits its peak. Choudhary maintained an "equal-weight" rating on the stock with a price target of S$3.43 due to demanding valuations. |
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Pinnacle
Master |
23-Oct-2007 14:18
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nickyng. Time to cover back. $4.72 now |
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knightrider
Elite |
23-Oct-2007 13:55
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DJ MARKET TALK: Labroy Marine +6%; Likely On SembMarine Switching (2007/10/23 11:49AM) -------------------------------------------------------------------------------- 0349 GMT [Dow Jones] Labroy Marine (L26.SG) +6.0% at S$2.66, cap tipped at S$2.72. Share price rise could be due to hopes it will benefit from SembMarine''s (S51.SG) FX loss scandal. Analyst at local house says there could be switching out of SembMarine into Labroy after SembMarine hit by news of unauthorized FX trading. But urges caution; "Labroy faces a totally different issue; there''s execution risk as it has never built a rig before." Resistance at S$2.72 (midpoint between 10-day moving average of S$2.64 and October''s multi-month high of S$2.79. (KIG) |
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Pinnacle
Master |
23-Oct-2007 11:45
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Goldman Sachs SembCorp Marine announced after market close today that it may incur unrealized forex losses of as much as US$165m due to several forex transactions, which SembCorp Marine group finance director entered for its wholly-owned subsidiary Jurong Shipyard. SembCorp Marine says the transactions were unauthorized, and has sought professional advice from legal advisor Drew & Napier and accounting firm Ernst and Young to look into the matter. SembCorp Marine has taken several corrective actions, including the removal of the finance director from group responsibilities. In addition, SembCorp Marine also found an US$83m transaction, which Jurong Shipyard paid to one of the banks, and SembCorp Marine is still assessing whether this is recoverable. While SembCorp Marine is in the process of getting more information from the banks, SembCorp Marine believes the discovered losses so far would represent most of the potential losses. Separately, SembCorp Marine announced that it has sold 39mn shares of Cosco Corp Singapore for S$272mn. Following the sale, SembCorp Marine will hold only 5% of Cosco Corp Singapore (previously held 7%). Analysis Assuming the losses were valid, SembCorp Marine could potentially lose as much as US$248mn, or S$0.18 per share. The losses, however, should be partly offset by the one-off disposal gain of S$230mn from the sale of Cosco Corporation shares. Implications We believe the market will view this announcement negatively, and see potential share price weakness when the stock is requoted for trading at 10am tomorrow. We maintain our Neutral rating due to SembCorp Marine?s full valuations; our 12-month SOTP-based price target remains at S$4.40. Key risks include poor execution, project cost overruns, competition risk from lower cost yards, and significantly lower oil prices. |
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nickyng
Supreme |
23-Oct-2007 11:38
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ok..if u hv confidence on this burger pls buy more loh...more rooms for me to SHORT ! :) hee... |
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joshconsultancy
Member |
23-Oct-2007 11:34
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i'm in long on it, ha! 4.78 looks a gd discount. according to my rough calculations, >1m of market cap has been wiped off for $500m of FX losses (conservative already). |
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Pinnacle
Master |
23-Oct-2007 11:33
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CITI - Unauthorized Forex Transactions Discovered Buy/Low Risk 1L Price (22 Oct 07) S$5.60 Target price S$5.60 Expected share price return 0.0% Expected dividend yield 2.5% Expected total return 2.5% Market Cap S$11,588M US$7,920M Startling discovery ? SembMarine (SMM) has announced that one of its employees, Mr Wee Sing Guan (Director, Group Finance), had entered into various unauthorized foreign exchange transactions for the account of Jurong Shipyard Pte Ltd (JSPL) and misled JSPL and SMM in relation to these transactions. Mr. Wee has been relieved of all his duties. Legal proceedings ? SMM and JSPL have appointed Drew & Napier LLC jointly with Ernst & Young to investigate the unauthorized transactions, their nature and the full circumstances under which they came to be transacted and to work with a special committee of the SMM Board. Impact ? SMM has received mark-to-market information on the transactions from various banks and the estimated unrealized loss is in the region of US$165m if the transactions are valid. This does not include about US$83m which JSPL paid to one of the banks before the transactions were discovered. Full extent undetermined yet ? The extent of impact from these unauthorized transactions on SMM?s FY07 results will depend on the movements of the exchange rates, outcome of the investigations and disputes, if any. Based on information provided by the group, this impact could amount to US$248m (about S$360m or about S$0.17/sh). This, we think, will be partly offset by the S$230m placement gains of Cosco Corp shares in the market yesterday. Operations as per normal ? Business is as usual at JSPL?s yard operations. |
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Pinnacle
Master |
23-Oct-2007 11:23
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As far as I know, all companys will use the PO they received to sell it to the banks at different currencies denominator. This is to hedge for better forex exchange and gain if the currencies move up. This is also to offset the credit term which can be months and is a standard industrial practice. But sembmar issue may not be this simple. There should be more than meet the eyes. |
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nickyng
Supreme |
23-Oct-2007 11:01
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ok..now can SHORT!! 4.78 !! hee..shorted 5x $4.78 !!! wish me luck !! :PP |
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Farmer
Master |
23-Oct-2007 11:01
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It's too early to put a fair price to it right now since the expert are still investigating the extend of the damage caused! But judging from CAO's Saga, the loss is almost there(I believe they've already done their internal investigation and estimation). One thing for sure, this counter will be condemn for the next few months, so dun rush in for long term investor. I'm looking at it's impact for the same industry as we've realised another risk involving the "currency hedge". Will consider at lower $4. |
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787180
Master |
23-Oct-2007 10:59
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Sold off mine Sembawang at $4.90..cpf held many years ago...may want to switch all to yangzijiang..any comments..very tempted to go in at ab half the price of Sembawabang Yangzijiang $3-$4 stock Posted: Tue Oct 23, 2007 10:39 am Post subject:
-------------------------------------------------------------------------------- Yangzijiang tested $2.87 recently again -------------------------------------------------------------------------------- Believe YZJ will cross $3 and heads towards $3.50-$4.00 when included in STI index in 2008 and when QII funds start buying..will be another Cosco and Yanlord..many shorted recently at $2.70 but it continues to move up after hitting alow of $2.49 on Oct 23 Yangzijiang Shipbuilding -------------------------------------------------------------------------------- Yangzijiang To Bounce To S$3.20 Resistance: OCBC [Dow Jones] Yangzijiang Shipbuilding (BS6.SG) +3.4% at S$2.77; OCBC says charts tip bounce up to resistance at S$3.20. "The short-term stochastic indicator has reversed direction from its dip close to the oversold zone, signaling further upside lies in the days ahead," research note says. Adds stock showing signs of recovery after three-day pullback, falling to low of S$2.43 on Oct. 17 before reversing to close above the 23.6% Fibonacci retracement level. Also notes bullish candlestick pattern formed yesterday; support level set at 38.2% Fibonacci level of S$2.29.    |
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Forglory
Member |
23-Oct-2007 10:57
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Seems like a semi-CAO being played out once more...but wht were they doing with forex exchange? That's a bit puzzling. I mean if they were trading oil derivatives, at least its understandable, given the nature of their business... |
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Pinnacle
Master |
23-Oct-2007 10:44
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DBS Vickers - Shocking potential forex hit Hold S$5.60 (Downgrade) Price Target : 12-month S$ 5.50 (Prev S$ 5.75) Story: SembCorp Marine announces that Finance Director, Mr Wee Sing Guan, entered into various unauthorised forex transactions. Point: Based on mark-to-market information, the estimated unrealised loss arising from the foreign exchange transactions is in the region of US$165m (S$242m). We think that the loss could be higher taking into account the sum of approximately US$83m, which SMM paid to the banks before these transactions were discovered. Thus, the loss could escalate to US$248m (S$363m). Separately, SMM has also divested 39m shares in Cosco at S$6.90-7.27, which should result in a gain of around S$230m, offsetting 63% to 95% of the potential loss. Relevance: Although the quantum of the forex losses represents only 17.5Scts per SMM share, and core operations in terms of rig building, conversion and shiprepair activities are on track, investor confidence will be shaken and we believe that the shares are unlikely to perform in the short term. The uncertainty remains whether there could be more losses unearthed during the investigations and the lack of internal controls. We are reducing our FY07 estimates by 40% to take into account the maximum negative impact of S$133m. Given this uncertainty and the share price trading close to our TP, we downgrade SMM to a Hold with a revised TP of S$5.50. |
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Pinnacle
Master |
23-Oct-2007 10:41
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It has not reached the price that I want to pick up. So wait for another time. Maybe 1 Nov, when financal report is out, will have another opportunity. 
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jasonrxz
Senior |
23-Oct-2007 10:41
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Is this current price of 4.94 consider stable and is appropriate time for us to get in and buy? Any comments??? Thks |
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CWQuah
Master |
23-Oct-2007 10:40
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Another Great Sembawang Sale for the BBs. Consistently among all the trade sizes (using vol distribution charts), buy ups exceed the sell downs... Forex loss is one-time write off, but their remaining 4.98% stake in Coscocorp if held till the end of 2008 - jackpot. The other unknown at this point is the legal costs - Sembcorp vs banks, vs ex-Grp Finance Director? |
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elfinchilde
Elite |
23-Oct-2007 10:28
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well, looking at busd data, appears as tho BBs are talking one thing and doing another. large lots are buy ups. |
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nickyng
Supreme |
23-Oct-2007 10:23
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darn...4.94 now!! let go too early :P |
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787180
Master |
23-Oct-2007 10:22
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Pinnacle..got profit just take first...got scandal..takes some time for it to move up..or switch to yangzijiang..looks like $3-4 no problem when included in STI index next year..breakout recently when it tested $2.87 recently again..many shorted but it still move up..institutional favourite like Cosco and yanlord |
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