• The WTO has forecasted a rise in global trade volume in 2024, especially for business cycle related goods. IATA also predict that Asia-Pacific passenger demand would recover by 2024, and grow faster than other regions in the longer term. The price of Brent Crude Oil has also spent the majority of its time below S$80/bbl since November.
   
• Despite regional benchmark downturns in the last fortnight, APAC Transportation stocks have shown resilience by averaging marginal gains. In Singapore, the 10 most traded stocks of the Sector have averaged 5.8% gains while booking S$25 million of combined net institutional inflow.
   
• Among Singapore’s 10 most traded Transportation stocks, the three strongest performing stocks over the past fortnight included COSCO Shipping Singapore, Chasen and Samudera Shipping, averaging 16.6% gains, with all three notching up higher trading turnover levels compared to 2023 levels. Meanwhile Singapore Post, MarcoPolo Marine and Singapore Airlines were more in-line with broader benchmarks, averaging 2.6% declines.
   

Back in October, the WTO predicted that global merchandise trade volume growth would expand to 3.3% in 2024 from 0.8% in 2023. The report qualified that the ‘stronger growth predicted for 2024 is likely to be driven by increased trade in goods closely linked to the business cycle, such as machinery and consumer durables, which tend to recover when economic growth stabilises’. IATA also expects total passenger demand levels in Asia-Pacific to be back to pre-COVID levels in 2024, with the region also expected to be the fastest growing region over the next 20 years, with China, India, Japan, Indonesia, Thailand, and Vietnam among the top 15 largest passenger markets. Transportation stocks have also been supported by the price of Brent Crude Oil spending the majority of its time below S$80/bbl since November.

Singapore Airlines and SATS are both STI constituents, and the most traded stocks of the Transportation Sector in Singapore. Last year, Singapore Airlines booked a 25.2% total return, while SATS generated a 2.4% gain, however this year SATS with a 6.5% gain has outpaced Singapore Airlines. Since 15 June 2023, when the share price of SATS (S$2.59) relative to the price of Singapore Airlines (S$7.91), reached an 8-year and 4-month low (0.327), SATS has gained 13.1% while Singapore Airlines has generated a 13.0% decline in total return. SATS noted in November that the integration of SATS and WFS is on track, bringing productivity synergies that have contributed to the financial performance of the combined business, as demonstrated with the 1HFY24 (ended 30 Sep) operating margin improving by 8.4% over 1HFY23. Following the results, DBS Group Research updated its 12-month Target Price on SATS from S$3.20 to S$3.40. According to Refinitiv the current Refinitiv consensus estimates Target Price on SA TS is S$3.192.

The most traded 10 stocks of Singapore’s Transportation sector are tabled below. Note that Airports of Thailand SDR is also listed for trading on SGX.

Source: SGX, Refinitiv (Data as of 12 January 2024)

As detailed in the table above, COSCO SHIPPING International (Singapore) Co has seen the strongest price gains over the past fortnight among the 10 stocks, followed by Chasen Holdings and Samudera Shipping Line.

COSCO SHIPPING International (Singapore) Co has also seen its average daily trading turnover up 11-fold from 2023 levels. Back on 15 Dec, COSCO SHIPPING International (Singapore) Co, announced its wholly-owned subsidiary had proposed to acquire 100% of the shares of Golden Logistics & Storage Sdn Bhd, a Malaysian company involved in the operation of non-container shipping agency,

bulk cargo agency and logistics. The seller is COSCO Shipping (South East Asia) Pte Ltd, an interested person as defined by the Singapore Exchange Listing Manual. The proposed acquisition has an aggregate consideration of MYR 10.86 million, and is subject to the approval of the relevant authorities and the satisfaction of certain conditions.

Chasen Holdings disclosed back on 13 Dec that it was exploring a possible deal with an international company involving some of its subsidiaries. On 22 Dec the company announced it had agreed to sell 72% of the combined shares of some of its subsidiaries for S$67.4 million on a cash-free and debt-free basis. The Company expects to receive about S$59.3 million net from the sale. The deal is not final yet and depends on the final contracts and the approvals and clearances from the relevant authorities and parties, including the company's shareholders. The first nine sessions of the year have seen the stock rank just outside the top 50 traded stocks by turnover, versus ranking as a top 400 stock by trading turnover prior to 22 Dec.

Meanwhile, Samudera Shipping Line announced back on 27 Dec that its subsidiary PT Samudera Shipping Indonesia had entered into memorandums of agreement for the acquisition of two ethylene gas carriers from unrelated parties. Yangzijiang Shipbuilding (Holdings) which represents the Shipbuilding Sector has also generated a 6.7% gain over the past fortnight.

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