Speed bumps ahead for Singapore's land transport sector

SINGAPORE (July 21): Maybank Kim Eng is maintaining its “negative” rating for Singapore’s land transport sector, according to a report issued on Thursday.

The research house also indicated that SMRT Corporation shareholders should accept Temasek’s offer of privatisation, while pointing out that the privatisation of SMRT may have negative implications for ComfortDelGro.

The research house believes that the New Rail Financing Framework (NRFF) represents an “unfavourable deal” for SMRT shareholders. As Temasek's privatisation offer of $1.68 per share represents a 23.5% premium to the research house’s fair value of $1.36, shareholders should accept the offer, says Maybank analyst Derrick Heng.

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