Transportation stocks to rally on back of sharp ridership spike

SEA Games and SG50 celebrations to give a big boost.

The Year of the Goat is expected to be an auspicious one for transportation companies in Singapore, what with a sharp increase in public ridership and a slew of big-ticket events slated to happen in the city-state.

Statistics released over the weekend showed that public transport ridership in Singapore registered a 4.6% year-on-year growth in 2014, hitting a record 6.65 million trips per day on the city’s buses, MRTs and LRTs.

Analysts note that this number is expected to receive another boost to the upside in 2015, thanks primarily to a number of sporting events and the country’s Jubilee celebrations.

For instance, Singapore is slated to host the 28th SEA Games for the first time in over 20 years in the second quarter.

Nicholas Teo of CMC Markets states that this biannual regional sporting event is expected to bring in close to 20,000 visitors into the country, condensed over a two- to three-week period in June.

“This will be followed by a series of similar international sporting events aimed at bringing in more tourist visits to the island, including formula one racing, rugby, tennis and international swimming meets. With more visitors, domestic travel is also likely to increase,” he notes.

Ridership on public transport will also see a pickup this year because of an increase in community events held island wide, as Singapore celebrates its golden jubilee this year.

“All three listed public transport companies - Comfort Delgro, Singapore Bus Service and SMRT - will be in the sweet spot to leverage this expected pickup in domestic travel, especially as most of this ‘added’ ridership is expected to occur in the non- peak travel period of the day,” Teo states.