Friday, May 23, 2014

Too Big To Fall

And you thought the whole shebang was about shaving off some minutes from your waiting time for the next bus. A little birdie just let it be known that the duopoly of public bus transport operators was losing money in recent times, to the tune of some $40 million a year. You'll never glean this from the published figures, the SBS Transit 2013 annual report indicates a healthy operating profit of $15.526 millions, down from 2012's $25.418 millions. The red ink must be stanched at all cost.

The sale of assets to the Government will net a transfusion of cash, whether priced at written down value or cost at acquisition. Whatever's best for dressing up the books. Thanks to the greedy anticipation of large dividend payouts when the huge amount of "free money" rushes in, shares of both companies have soared and closed at their highest in two years.

You will appreciate the popularity of the exercise with stakeholders when you know who stands to benefit most from the bailout:

SMRT Top 5 largest shareholders:
Temasek Holdings Pte Ltd (54.23%)
DBSN Services Pte Ltd (4.97%)
DBS Nominees Pte Ltd (3.70%)
Citibank Nominees Pte Ltd (3.56%)
HSBC (Singapore) Nominees Pte Ltd (2.18)

SBS Transit Top 5 largest shareholders:
Comfort Delgro Corporation Limited (75.21%)
BNP Paribas Securites Services Singapore (3.55%)
DBS Nominees Pte Ltd (1.70%)
United Overseas Bank Nominees Pte Ltd (0.91%)
Citibank Nominees Singapore Pte Ltd (0.52%)

ComfortDelGro Corp's 3rd largest shareholder used to be the Singapore Labour Foundation (after DBS nominees and DBSN Services), which has pared down its stake in the transport giant over the years, from 12.08% (2011), 11.18% (2012) to 2.47% in 2013.

Whither the harassed ordinary commuter? Same old, same old, pay and pay until broke. It's no coincidence that an Australian bus operator has declared their intent to enter the "ideal" Singapore market, where profits are guaranteed by captive consumers who have no alternative but to grin and bear it.

8 comments:

  1. If nationalised, why don't our PAP Govt just admit these Temasick companies are a complete failure which will need a govt bailout even though they may be publicly listed ?

    And for a Govt bailout, it means we taxpayers will be paying for any eventual losses either by way of increased fares or indirect taxes ?

    Again WHAT THE FUCK, profits they take, losses we suffer just like the siphoning of CPF dividends ?

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  2. Another increase of GDP...and bonuses for the Minister..

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  3. Profit for the cronies is only half the objectives; by now, anyone familiar with the Singapore Economic model must understand that they have adopted the Keynesian debt-fueled economy. Remember that Forbes article equating Singapore to Iceland? Total national debt to GDP of red dot is well above 200% (over 100% is govt debt to its people, borrowed from your CPF). How does the central planners in the PAP/MAS intend to pay back all this debt? By inflation of course. Problem is with the Strong Sing dollar policy to attract more money laundering to keep the banks afloat and the property market humming along, imported inflation will be low. So how to generate inflation? Via non-tradeable, government-generated inflation of course. That means every kind of expenses, from healthcare to education to property to transport must be inflated, given yearly targeted-rate of growth. Which means your real income, if you are not part of the civil service, will always be falling. Singapore's debt can only be inflated away, repaid with SGD of lesser value, the masters up there are all educated in Oxbridge or Harvard, their theology is Keynes, that is their religion.

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  4. wonder If nationalized, will the CEOs still get fantastic pays and huge bonuses?

    This is Singapore and I love it!

    No matter how much howling and bitching it's here to stay.

    Too late! :-)

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  5. This is called privatization of profits and socialization of losses.
    Head you win, tail I lose.

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  6. Private car deals too are ruthlessly exploited, think COE and all the other taxes associated with purchasing and maintaining a car. Can't afford a car and with escalating public transport fares, like an animal caught in a perfect trap.

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  7. Interesting to note those who screw up not once...not thrice..but so many times over the years can still continue to keep their heads on their shoulders and still collect blood money...

    Sure these people are human beings...or blood sucking parasites...suck and suck until the host dies...can't be symbiotes here i see...

    zzzz

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  8. Is Temasek too big to fail or too PIG to fail?

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