Singapore shares inch up; transport stocks see mixed trading
SINGAPORE May 22 (Reuters) - Singapore shares eked out small gains on Thursday, with transport stocks seeing mixed trading after authorities announced on Wednesday sweeping changes to the public bus services.
The benchmark Straits Times Index was higher 0.2 percent at 3,257.34 by 0434 GMT, with inertia from earlier in the week dragging on trading volume. MSCI's broadest index of Asia-Pacific shares outside Japan was up 1.1 percent.
Singapore's Land Transport Authority announced on Wednesday a major overhaul of the public bus industry, where the government will own the buses and appoint routes and contract the service to operators.
Shares of public bus operator SBS Transit Ltd surged as much as 12.4 percent to S$1.59, their highest in nearly two years, in early trading. ComfortDelGro, which owns 75 percent of SBS and has also rail assets, dropped 2.2 percent, stretching losses into a second day.
"Everyone expected changes to the bus and rail system to be announced at the same time," said CIMB trader Kuan Yee. "When they only announced restructuring for the bus services I think investors were disappointed."
Rival transport operator SMRT Ltd fell as much as 4.2 percent to an intra-day low of S$1.38.
"We expect ComfortDelGro to be a bigger beneficiary than SMRT as the former operates the largest bus fleet in Singapore via its 75 percent-owned subsidiary SBS Transit and also has experience operating a gross cost contracting model for its UK and Australia bus businesses," OCBC said in a research note.
The brokerage kept a "buy" rating on ComfortDelGro and a "hold" rating on SMRT.
Among other stocks, postal service company Singapore Post Ltd edged up 1.3 percent to a record high of S$1.56.
CIMB maintained its "add" rating on the stock, with a target price of S$1.61, saying they believed SingPost will continue to benefit from the growth in e-commerce, backed by its low-cost delivery network. (Reporting by Andrew Toh; Editing by Subhranshu Sahu)
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