SBS Transit, SMRT queried over unusual trading activity

The Singapore Exchange offices.
The Singapore Exchange offices. PHOTO: REUTERS

Transport counters SBS Transit and SMRT Corp were queried over unusual trading activity yesterday after Transport Minister Khaw Boon Wan hinted at restructuring the rail industry for a second time in a month.

SBS jumped by as much as 9.4 per cent to its highest intra-day price since February 2011, while train operator SMRT was ahead by 6.4 per cent at one point, triggering queries to both companies from the Singapore Exchange (SGX).

SBS closed at $2.02, up by 10 cents or 5.2 per cent, while SMRT ended the day at $1.56, up by 5.4 per cent or eight cents.

SMRT told the SGX that there were media reports on the Joint Forum on Infrastructure Maintenance yesterday, in which Mr Khaw again suggested the regulator should oversee the firm's assets.

But it said it was unaware of reasons for the "unusual price and volume movement".

Mr Khaw told the forum yesterday that "creating an excellent

rail system requires an inte-grated approach, from design to construction, actual operations and maintenance".

He said the current model separates the designer and builder - the Land Transport Authority - from the operators - SMRT Corp and SBS Transit.

For this reason, Mr Khaw said, he had instructed the LTA to build up its engineering crew.

"They must establish a team that is able to take on operations and maintenance, if we decide to move in that direction," he added.

Meanwhile, SBS said it was not aware of any reasons for "unusual price movements", adding that the public is aware that the public bus industry is undergoing a major restructuring that started in the second half of last year.

It is moving from a privatised model - where SMRT and SBS own all buses and keep all fare revenue - to a government contracting model.

Under the new system, the Government will own the buses as well as bus infrastructure, such as depots, while the LTA will "negotiate with the incumbents to run (contracting routes in) nine packages", SBS said.

A version of this article appeared in the print edition of The Straits Times on December 05, 2015, with the headline 'SBS Transit, SMRT queried over unusual trading activity'. Print Edition | Subscribe