Keppel Corp, SembCorp Industries, SembCorp Marine – Trio hit by plunging oil prices

Oil prices started to decline from June 2014 when the price was US$115 per barrel. In two years, oil prices lost about 60% to US$43 per barrel now.

With this, the fortunes of Keppel Corp, SembCorp industries and SembCorp Marine took a serious beating in their share prices.

Counter Date Share price ($) Change (%)
Keppel Corp 1 June 2014 9.49
16 Sep 2016 5.22 -45.0
SembCorp Industries 1 June 2014 5.03
16 Sep 2016 2.59 -48.5
SembCorp Marine 1 June 2014 3.81
16 Sep 2016 1.25 -67.2

The worst hit was SembCorp Marine Ltd, losing 67.2% to $1.25.

I have these stocks in my portfolio. My fortune was identical as above. The table below shows the average price of the counter bought in the years indicated.

Counter Date Share price ($) Change (%)
Keppel Corp 2011, 2014 Avg 9.86
16 Sep 2016 5.22 -47.0
SembCorp Industries 2013 5.10
16 Sep 2016 2.59 -49.2
SembCorp Marine 2013, 2014, 2015 Avg 3.34
16 Sep 2016 1.25 -62.5

I did alright with Keppel Corp and SembCorp Industries since I had made some money out of these stocks in the past by way of dividends received and capital gains on sales.

But SembCorp Marine was a losing stock for me. I went into the stock in 2013, 2014 and 2015 thinking that prices had already dropped so much. By adopting averaging down my cost of the share, it sinks me further. This strategy clearly did not work especially when the company is facing difficulties in their rig-building and ship-building businesses.

See chart of share prices of SembCorp Marine taken from Bloomberg.sembcorp-marine

Copyright © 2016, limkimtong for Living Investment

The material presented is intended to be general and written in layman’s language as much as it is possible. The author shall not be liable for any direct or consequential loss arising from any use of material written. Please seek professional advice from your financial advisor or financial institutions on material written covering financial matters.

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