Tuesday, July 30, 2013


I divested out of SBS and SMRT early this year as I am not convinced that the deteriorating fundamentals can be arrested and improved upon over time.The fact that both companies are currently being run by ex-SAF personnel is also a major source of concern as they lack the business acumen and sensitivity to minority shareholders interests.Operating in a climate where raising fare is politically sensitive and with foreign drivers clamouring for equal treatment with local drivers, I do not think operating margin can improve but will definitely deteriorate. I also see no sign that management is willing to share the pain with minority shareholders in instituting pay reform at management levels.Looking at the current set of results from SMRT, I feel vindicated in my decision to get out early this year. I am a buy and hold investor but will divest when business fundamentals no longer warrant holding the stocks.
I incurred a small loss on both stocks on my divestment without including the dividends. With dividends, I would probably have a made a small profit.


  1. Is it safe to presume you hold same "negative" views on ComfortDelgro?

    1. Actually no because SBS portion in Comfortdelgro revenues is around 30% (I guess). For ComfortDelgro taxi operation, they can increase surcharge to cope with rising oil prices. Also almost 50% of revenues come from overseas. Not invested in Comfortdelgro.