SINGAPORE (Dec 8): CIMB is maintaining its “reduce” rating on transport operator SMRT Corp. but raising its target price to $1.37 from $1.22.

CIMB warns SMRT may not get favourable terms from any government restructuring of the country's rail network as the market appears to be pricing in.

“While capital-unlocking through an asset sale is a positive, market views that the government will grant favourable terms to SMRT are unwarranted,” CIMB says, noting that SMRT has obligations under the old rail regime and that the government is looking to balance public and operator interests, which could “point to the risk of an undesirable outcome for SMRT”.

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