Public transport operators to rake in huge gains on back of oil rout

Higher fares will also provide another boost.

Land transport operators are expected to rake in huge gains as oil prices collapse. According to DBS, the massive price slump will offset mitigating factors such as the SGD’s weakness against the greenback.

Although oil has fallen by close to 50% in just three months, CD and SMRT’s share price have climbed by only 1% to 3%. DBS believes that oil prices will hover at US$80 and US$70 per barrel for 2015 and 2016/

“Energy and electricity account for between 9% to 14% of CD and SMRT’s costs. The recent slump in oil price and bringing it to multi-year lows will have a positive impact on land transport operators, based on our expectations. We have thus further lowered our cost assumptions for both operators, and are raising forecasts by 4%-9%,” stated DBS.

Join Singapore Business Review community
A NOTE FROM SINGAPORE BUSINESS REVIEW

The people you want to reach are already in this room.

Every quarter, SBR lands on the desks of the founders, CFOs, and directors running Asia's most consequential companies. Every day, they open our newsletter and read our website. It's a room that took twenty years to build — and it's the one most of our partners are trying to get into.

The good news is that the door is open. We work with companies on thought leadership articles, sponsored content, industry summits across Southeast Asia, regional awards programmes, podcasts, and media placements in print and digital. The shape of the right partnership depends on what you're trying to do, which is why we'd rather start with a conversation than send a rate card.


If you have something this room should know about, tell us. We'll tell you honestly whether we can help, and how.

No rate cards until we understand the brief. It's a better use of everyone's time.