Transportation stocks on the move in 2024

TRANSPORTATION stocks have been on a roll since the price of Brent Crude Oil stayed below US$80 per barrel in November 2023, and are expected to continue the momentum into 2024, said the Singapore Exchange (SGX) in a markets update on Monday (Jan 15).

Stronger growth has been predicted for this year, with the World Trade Organization forecasting a 3.3 per cent rise in global merchandise trade volume, SGX noted. Similarly, the International Air Transport Association is expecting total passenger demand in Asia-Pacific to be back to pre-Covid levels in 2024.

Among Singapore’s 10 most-traded transportation stocks, the past fortnight saw three top performers in Cosco Shipping International (Singapore), Chasen Holdings and Samudera Shipping. The trio averaged 16.6 per cent gains, on the back of higher trading turnover compared to 2023 levels.

On the other hand, Singapore Post, Marco Polo Marine and Singapore Airlines (SIA) were more in line with broader benchmarks, averaging 2.6 per cent declines, SGX noted.

At No 1 is Cosco Shipping, which has experienced the biggest increase in year-to-date (YTD) total returns at 26.5 per cent. The shipping counter announced on Dec 15 that its wholly owned subsidiary will acquire Malaysia-based Golden Logistics & Storage for RM10.9 million (S$3.1 million). The rationale for the acquisition is to provide integrated logistics solutions for its customers.

Chasen came in second for YTD total returns at 11.9 per cent. The logistics provider announced on Dec 22 that it has agreed to sell 72 per cent of the combined shares of its subsidiaries and expects to net S$59.3 million from the sale. Chasen has also ranked just outside the top 50 most-traded stocks by turnover in the first nine days of trading in 2024. In contrast, the stock ranked within the top 400 before Dec 22.

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Samudera Shipping Line came in third in YTD total returns at 11.4 per cent. The shipping company recently announced an acquisition of two ethylene gas carriers to ride on the growing ethylene market in Indonesia.

Straits Times Index constituents SIA and Sats posted contrasting YTD total returns. SIA recorded a negative 0.6 per cent YTD total return while Sats posted a 6.5 per cent YTD total return. Last year, SIA booked a 25.2 per cent total return, while Sats generated a 2.4 per cent total return.

Sats said in November 2023 that the integration with WFS is on track, leading to its operating margin improving by 8.4 per cent for H1 FY2024 ended Sep 30, 2023.