SMRT requests for trading halt, sparking speculation of major announcement

TRANSPORT operator SMRT Corp has requested for a halt in the trading of its shares, sparking market speculation of that a major announcement related to the proposed rail financing framework is pending.

On Friday, the train and taxi operator opened at S$1.550. The shares were trading around S$1.545 each, up half a cent, or 0.32 per cent, when the immediate halt was sought around noon. More than three million shares changed hands.

"The most likely reason is the development of the Rail Financing Framework, which has been much talked about,'' a broker speculated referring to new business model for Singapore's public bus industry which will be introduced in stages. One of the key differences between the old and new model is that under the new model, the government will assume ownership of all bus services-related infrastructure and assets.

"We have shared our views on this prior, in that the change will relief SMRT of major capex going forward. The proceeds, at least a portion, will likely be used to pare down debts and nett off accounts payable outstanding and due to the Land Transport Authority (for trains),'' an analyst at a local brokerage shared.

"If the trading halt is due to the rail framework, we believe there will be a positive impact on share price given the market expectations. As to the extent, will need to study the details when out,'' the analyst added.