The Straits Times / The Business Times News on Cosco

COSCO DIRECTOR CONVERTS OPTIONS

AN INDEPENDENT director of China-based shipping company Cosco Corp, Dr Wang Kai Yuen, has made good on his share options, having exercised them earlier this week.

Dr Wang, who is also a Member of Parliament, converted 500,000 options, which gave him a 0.046 per cent stake in the firm, according to a statement filed with the Singapore Exchange on Monday.

At 73.5 cents apiece, he would have paid $367,500 for the conversion. He is now sitting on a paper profit of $852,500, based on yesterday's closing price of $2.44.

Cosco, a bulk carrier that is transforming itself into a major ship-repairer, has been riding the tide of surging oil prices.

The stock has more than doubled this year, also boosted by the continuous stream of ship-repair jobs the firm has won in recent months as the energy-related boom continues unabated.

Market observers such as OCBC Investment Research also say Cosco can be a significant player in the oil rig business, in addition to being a major ship-repairer.

OCBC said Cosco's potential in the oil and marine business is enhanced because of its links to the Chinese market and its strategic tie-up with SembCorp Marine (SembMarine).

SembMarine and Keppel Corp have been the main beneficiaries of the huge demand for new oil rigs.

OCBC has a 'buy' on Cosco, with a fair value of $3.08.