Revamp of Singapore Bus Services Operating Framework – Impact on share prices

Now that Land Transport Authority (LTA) has announced the new operating framework of Singapore bus services come 2016, we know why there was so much interest in the shares of SMRT, SBS Transit and Comfort Delgro in recent days.

When I was tracking these stocks, the share prices as at 30 April 2014 were:

SMRT  $1.22
SBS Transit $1.25
Comfort Delgro $2.12

The prices on the day before the LTA’s announcement (21 May 2014) were:

SMRT  $1.435 (+17.6%)
SBS Transit $1.42 (+13.6%)
Comfort Delgro $2.30 (+8.4%)

Speculations of impending changes to be announced by LTA resulted in share price of SMRT surging 17.6%, SBS Transit going up 13.6% and Comfort Delgro up 8.4% for three weeks of this month alone.

After the announcement of sweeping changes in bus services operating framework, today’s share prices of these counters were:

SMRT  $1.47 (+2.44% over yesterday)
SBS Transit $1.60 (+13.07%)
Comfort Delgro $2.25 (- 2.17%)

SBS Transit jumped a whopping 13.07% in just one day. SMRT moved up 2.44% and Comfort Delgro decreased 2.17%. I think investors feel that SBS Transit has more to gain with the new bus services framework. Time will tell whether this is justified.

Copyright © 2014, 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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