SMRT (S53.SG) +1.5% at 6-session high of $2.06 on optimism over rail operator’s long-term prospects as Singapore government intends to spend $60 billion over next decade to double city-state’s rail network, says Dow Jones.

Investment includes rolling out Downtown, Thomson, Eastern Region lines, according to PM Lee Hsien Loong in his annual National Day Rally speech delivered yesterday. “SMRT is likely to be a long-term beneficiary of the decade-long rail network development programme,” says OCBC, which has Hold call with $2.16 target. Despite current gains, stock still consolidating in tight $2.01-$2.11 band of past 4 weeks on light volume, as investors generally still wary of near-term earnings pressure following SMRT’s recent warning of continued losses from new Circle Line operations.

“We see risks of a shortfall in CCL (Circle Line) ridership and higher start-up costs to operate CCL,” says Deutsche Bank, which has Sell call with $1.90 target.

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