Sembcorp Marine forex loss

When all seems going well, unexpected would happen. The moral of the story is never invest too heavily in a particular company, no matter how great the company is, unless it is your own company.

The biggest news today is the dismissal of Sembcorp Marine finance director. The unauthorised forex loss could be as high as US$248 million, US$83 million realised, US$165 million base on market to market info.

This is a shocking news. A big company like this should have its own proper internal control which prevent this sort of incident to happen. If you can recall, history tends to repeat itself. We have Baring and CAO went down, because of the internal control lapse. It is paramount that this is being fixed and proper control to be put in place. Full story.

In coming months, company share could be based down. Whether to do bargain hunt, it is up to you to decide.

CIMB:
Target price lowered to S$4.70 from S$4.90 following our earnings reduction;
downgrade to Trading Sell.

DBS:
Downgrade to Hold, TP cut to S$5.50, FY07F-09F estimates adjusted.

Kim Eng:
Downgrade to HOLD, TP revised down to S$4.80

Another notable news is Sembcorp Marine sold 39 million shares of Cosco for a gain of S$230 million. In some way, this is a view on Cosco share is much overvalued at current level. It has become too hot to handle.