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CCL Fully Opens

>> Tuesday, October 11, 2011

8 Oct 2011 marks the day the Circle Line rail network reaches full operational status.

It also the first day of higher fares on buses and trains, on the average it is an additional 2 cents more per ride. From a usual 71 cents ride to 73 cents, an increase of 2.8%.

It also serves as a reminder that the line took 10 years to complete. It was initially target to open from 2006 and fully operational in 2010. However, the Nicoll Highway collapsed on 20 April 2004, which claimed 4 lives, caused the construction to be delayed. Their sacrifice contributed to the progress we now enjoy.

It also means properties within walking distance of the newly opened mrt stations enjoy immediate property appreciation. Congrats to those who boldly invested or held on since the announcement of the mrt construction plans. Although it has been factored in the pricing and should not have an abrupt increase, nothing beats truly enjoying the convenience today.

Let's look forward to the opening of the downtown line, thomson line and eastern region line.

Meantime, looks like the transport companies will see revenue moving up by about 2.8%, so picking SMRT and SBS Transit shares may not be such a bad idea. Property hunting along the new mrt lines, especially at the interchange stations, can uncover some value for those with the holding power to wait till the opening of the lines projected to be about year 2020.

5 comments:

financialray October 11, 2011 at 12:14 PM  

Hmmm Lau,

Even if I have holding power ie lots of cash, I would prefer to wait for the next downturn which is almost guaranteed to come in the next 5 to 10 years.
Usually, when property is booming, nobody can see the cliff.
Similarly, when property is in the doldrums for years eg 1999-2003, people cannot see the light at the end of the tunnel. If you remember SARs, things were bad if people dared not even go out ...so all your restaurants, malls, shopping centres were quiet.

la papillion October 11, 2011 at 2:15 PM  

Hi,

Don't think it's correct that transport companies will earn more by increasing the fare. Most likely whichever company running the circle line (sbs iirc) will be losing more because of increased running cost. Revenues may bit translate into profits for them.

Lau October 11, 2011 at 3:35 PM  

FR,
Wow. Guaranteed to come. That's a bold statement.
And 5-10 years.. That's a long wait. What to invest in the mean time? Leaving in cash erodes due to sky high inflation.

Lau October 11, 2011 at 3:37 PM  

LP,
I was careful to use revenue n not profits.
Anyway. That is quite true. So we can expect more rounds of fare increases to subsidize operating cost.

financialray October 11, 2011 at 6:13 PM  

Hi Lau

5 to 10 years is actually quite a long time so unlikely our economy will go up, up and up.
1987 black Monday
1998 Asian economic crisis
2008-9 sub prime
so it appears that one heavy downturn comes every 5 to 10 years

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