A Changi Airport spin-off may benefit investors more so than Singaporeans

A REAL estate or business trust built from Changi Airport might give the Singapore equity market a spark of excitement, but its benefits to the broader market and to public financing are not as rosy as the hype might suggest.

Maybank Kim Eng's Chua Hak Bin and Lee Ju Ye last week suggested that the Singapore government spin off the first three terminals of Changi Airport into a listed trust. Doing so would help to revive the Singapore stock market with a marquee listing, and would reduce the government's fiscal burden when it comes to maintaining and expanding airport infrastructure, the analysts argued.

Investors in the Singapore market have a demonstrated affinity for high-yielding counters, and a trust with a premium, stable asset such as Changi Airport's three oldest terminals would certainly be well received. Given the Changi brand's global recognition, such a trust could also draw international investors to the Singapore market.