SMRT

[InvestArk]

i believe it is unwise for the BOD/Chairman to come up with any detailed plans and direction at this moment. SMRT is an entity which has been recently attracting alot of media attention and we all know how much political influence this can cause , probably buying some time keep thyself low would be a much more appropriate strategy to apply in the meantime.

[Freenasi]

I think the CEO should tell the equity owners the amount of loan they will undertake, how will it impact the operating cost with a larger fleet, whether their focus is profitability or disruption reduction in short term/long term. At this share price I think SMRT is of good value. But, it will be influenced by policies that it has no control on.

not convincing as no target dates/plan for completion of upgrades..trouble-free train rides.. etc..

BOD & Chairman needs to provide clear directions for this in order for public and shareholders to be comfortable!

[nornot]

I think the CEO should tell the equity owners the amount of loan they will undertake, how will it impact the operating cost with a larger fleet, whether their focus is profitability or disruption reduction in short term/long term. At this share price I think SMRT is of good value. But, it will be influenced by policies that it has no control on.

not convincing as no target dates/plan for completion of upgrades..trouble-free train rides.. etc..

BOD & Chairman needs to provide clear directions for this in order for public and shareholders to be comfortable!

does anyone have information on how maintenance contract for the trains and rails are drafted.
SMRT must have agree to a budget in the contract to cover these with the vendors and providers?

similarly to buying a product off the shelf with a extended warranty cover, regardless of the number of times it breaks down within the covered period, the cost of paying for the warranty cover will be the same.

[level13]

There is a sharp spike in the share px this morning. I wonder whats the reason, in the absence of any major news. Are investors expecting them to report a great set of results for the first 3 months of this year?

[brattzz]

Just some general positiveness that's all, SMRT needs time to recover through it's concrete actions...
Given time, see no reason why SMRT's share prices cannot recover back to it's glory days!

[CityFarmer]

It seems nobody aware the reason(s) for the spike of market price...

(not vested)

SGX advises caution after surge in SMRT shares

SINGAPORE – The share price of SMRT soared on Thursday, prompting the Singapore Exchange (SGX) to issue a “trade with caution” warning on the stock.

SMRT shares closed 19 per cent higher at S$1.215 apiece, while SBS Transit -- the smaller of Singapore’s two rail operators -- gained 7.6 per cent to end the day at S$1.27.

Responding to a query from SGX, SMRT said after the market close it was not aware of any information that had not been previously announced which might explain the trading.

“In view of the trading activities observed and the Issuer’s response, shareholders and potential investors should exercise caution when dealing in the securities,” SGX said.

“The exchange will investigate all possible transgressions and will work with the relevant regulatory agencies to pursue actions to maintain a fair, orderly and transparent market,” it added.

The Land Transport Authority (LTA) last week called a tender for a consultant to help it effectively manage its Rapid Transit System (RTS) assets.

This was in line with the New Rail Financing Framework, first adopted in 2010, whereby LTA would have full ownership and control of the RTS infrastructure and operating assets like trains.

The framework already applies to the recently opened Downtown line, and authorities have been in discussions with the operators of older lines on transiting to the new arrangement.

SMRT will release its results for financial year 2013/14 next Wednesday.

Channel NewsAsia

http://www.todayonline.com/business/sgx-...mrt-shares

[greengiraffe]

SMRT shares up 20% on asset sale speculation

Punters believe plan to sell rail assets to Govt is imminent
Published on Apr 25, 2014 1:18 AM


By Christopher Tan, Senior Correspondent

LISTED public transport operator SMRT Corp's shares yesterday staged their biggest-ever one-day gain in recent memory, soaring almost 20 per cent, as investors speculated that a plan for SMRT to sell its rail assets to the Government was imminent.

Shares of rival rail operator SBS Transit and its parent company ComfortDelGro also rose 7 per cent and 3 per cent respectively.

Market watchers said punters may be assuming that SBS Transit will do likewise with operating assets of its North-East Line.

The Straits Times understands that Temasek-owned SMRT, led by former army chief Desmond Kuek, made a detailed submission to the Government on Wednesday following months of discussions to move its rail business to a new financing framework.

From the outset, all rail infrastructure in Singapore came under the ownership of the two operators here. This means they are in charge of maintaining and replacing trains, signalling systems and other equipment involved in operating train services here.

But in 2010, the Government introduced a new financing framework. SBS Transit's Downtown Line was the first contract under this framework. Under it, the Government owns all assets, and is responsible for replacing them. This allows operators to focus on meeting operating service standards and maintenance.

Since Mr Kuek took over the helm at SMRT in 2012, he has expressed keen interest in converting SMRT's existing lines - the North-South, East-West and Circle lines - to this new framework. This would free SMRT from having to incur huge capital expenditures on asset replacement, which can be a drag on profits.

This spending is expected to increase, given the tougher stance the Government is taking on service outages following a spate of high-profile train breakdowns that started about three years ago.

But the main stumbling block to Mr Kuek's plans has been the valuation of SMRT's assets, as well as the remaining years of its current operating contract.

The North-South and East-West lines' contracts end in 2028, while that for the Circle Line expires in 2019.

"It is hard to arrive at a price that both the public and... shareholders will be happy with," a source close to the talks said.

Yesterday, CIMB analyst Gary Ng said in a report that the financing framework move was "highly possible" and that SMRT was "making inroads with regulators".

The new framework would be a more "sustainable" model and lead to more predictable cashflows for SMRT, he added.

Some investors yesterday also bet that if SMRT's proposal were accepted, the same framework would be applied to SBS Transit's North-East Line.

Maybank Kim Eng analyst Derrick Heng said a switch to the new rail financing framework would take place "eventually", but the transition may not be more favourable to the public than shareholders in the short term.

The market was also rife with rumours yesterday of SMRT's privatisation - and even nationalisation - but analysts who follow the company said this was less likely.

SMRT's share surge - which saw it climb 21.6 per cent to hit an intra-day high of $1.24 before closing at $1.22 - attracted the attention of the Singapore Exchange.

The regulator queried the company on this, but SMRT said it did not know the reason for the surge.

christan@sph.com.sg

[CityFarmer]

Asset-light PTOs are juicy for investors. The sell of rail assets back to Govt should be minor, even it is materialized, IMO.

(not vested)

SMRT shares up 20% on asset sale speculation

Punters believe plan to sell rail assets to Govt is imminent
Published on Apr 25, 2014 1:18 AM


By Christopher Tan, Senior Correspondent

LISTED public transport operator SMRT Corp's shares yesterday staged their biggest-ever one-day gain in recent memory, soaring almost 20 per cent, as investors speculated that a plan for SMRT to sell its rail assets to the Government was imminent.

Shares of rival rail operator SBS Transit and its parent company ComfortDelGro also rose 7 per cent and 3 per cent respectively.

Market watchers said punters may be assuming that SBS Transit will do likewise with operating assets of its North-East Line.

The Straits Times understands that Temasek-owned SMRT, led by former army chief Desmond Kuek, made a detailed submission to the Government on Wednesday following months of discussions to move its rail business to a new financing framework.

From the outset, all rail infrastructure in Singapore came under the ownership of the two operators here. This means they are in charge of maintaining and replacing trains, signalling systems and other equipment involved in operating train services here.

But in 2010, the Government introduced a new financing framework. SBS Transit's Downtown Line was the first contract under this framework. Under it, the Government owns all assets, and is responsible for replacing them. This allows operators to focus on meeting operating service standards and maintenance.

Since Mr Kuek took over the helm at SMRT in 2012, he has expressed keen interest in converting SMRT's existing lines - the North-South, East-West and Circle lines - to this new framework. This would free SMRT from having to incur huge capital expenditures on asset replacement, which can be a drag on profits.

This spending is expected to increase, given the tougher stance the Government is taking on service outages following a spate of high-profile train breakdowns that started about three years ago.

But the main stumbling block to Mr Kuek's plans has been the valuation of SMRT's assets, as well as the remaining years of its current operating contract.

The North-South and East-West lines' contracts end in 2028, while that for the Circle Line expires in 2019.

"It is hard to arrive at a price that both the public and... shareholders will be happy with," a source close to the talks said.

Yesterday, CIMB analyst Gary Ng said in a report that the financing framework move was "highly possible" and that SMRT was "making inroads with regulators".

The new framework would be a more "sustainable" model and lead to more predictable cashflows for SMRT, he added.

Some investors yesterday also bet that if SMRT's proposal were accepted, the same framework would be applied to SBS Transit's North-East Line.

Maybank Kim Eng analyst Derrick Heng said a switch to the new rail financing framework would take place "eventually", but the transition may not be more favourable to the public than shareholders in the short term.

The market was also rife with rumours yesterday of SMRT's privatisation - and even nationalisation - but analysts who follow the company said this was less likely.

SMRT's share surge - which saw it climb 21.6 per cent to hit an intra-day high of $1.24 before closing at $1.22 - attracted the attention of the Singapore Exchange.

The regulator queried the company on this, but SMRT said it did not know the reason for the surge.

christan@sph.com.sg

[brattzz]

market approves, 25 millions shares @ $1.20+ exchanged hands..

[arriyana]

Just a quick coverage on SMRT price surge by James

http://www.stokflok.com/content/why-smrt...reasesurge