SINGAPORE (Feb 26): ComfortDelGro Corp’s proposed joint venture with ride-hailing app maker Uber, which had been hailed as a cure for its ailing taxi operations, has been set back by a possible four months. Singapore’s competition watchdog says it needs more information before it can make a decision on whether the tie-up would reduce competition, and will take up to 120 days for a second review phase.

Shares of ComfortDelGro have not been doing well. The country’s largest cab operator only gained 0.5% this year, versus a 2.5% climb in the Straits Times Index, to close at $2.02 on Feb 21. After a tough 2017, in which the counter was one of just seven STI components that declined, some analysts think the stock price is bottoming out.

“We could see certain segments at an inflection point, such as a stabilisation of the operating environment for Singapore taxis after its proposed alliance with Uber,” says Andrew Chow, head of research at UOB Kay Hian. “Its bus model has migrated to a bus contracting model (BCM), which is structurally positive, both in terms of profitability and cash flow. Thus, the group will be more cash-generative, in our view, with less capex commitments. And this could pave the way for more accretive acquisitions overseas.”

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