Is Singapore Airlines stock a ‘sell’?

Singapore Airlines shares received a boost from more relaxed border measures announced over the weekend.

  • Singapore Airlines (SGX: C6L) share price soars to S$5.14 per share
  • The government is offering more wage support for the aviation sector
  • Singapore is shortening the stay-home-notice period for visitors from some countries
  • Keen to take advantage of SIA’s rising share price? Open a free account with us to go long on the stock now.

SIA shares jump to one-month high

Singapore Airlines (SIA) climbed 3.2% to S$5.14 as of 09:36 SGT on Monday, clocking a traded volume of about 5.3 million shares by then and becoming the second most actively traded counter on the bourse.

The last time the counter closed at that price level was at the end of August this year.

As of Monday morning, the flag carrier’s shares attracted two ‘buy’, five ‘hold’, and five ‘sell’ recommendations from analysts, according to Bloomberg data. Their average target price was S$4.52.

The Civil Aviation Authority of Singapore last Monday said the aviation industry will receive an additional S$130 million in wage support from the government for the next six months.

The workforce retention grant will offer companies 30% support for the first S$4,600 in gross monthly wages paid to each local employee from October to December this year. The support will be lowered to 10%, of the first S$4,600 paid, from January to March next year.

What are the latest border measures?

On Saturday, Singapore announced it will reduce the stay-home-notice (SHN) period for incoming travellers with recent travel history to Category 3 and 4 countries because the Delta variant has a shorter incubation period.

The SHN period for such travellers will be cut from 14 days to ten days, effective 23:59 SGT on 06 October 2021.

The US, the UK, Greece, and the Maldives will also be added to Category 3 on Wednesday.

As for Singapore’s Vaccinated Travel Lane, the pilot scheme allows vaccinated travellers from select nations to enter the city-state without quarantine. Bloomberg Intelligence (BI) wrote last week that this ‘could support capacity restoration’ at the flagship airline.

However, the city-state’s rising Covid-19 cases may deter would-be visitors in the near term, BI analysts said.

SIA spends remaining S$600 million of rights issue

Last month, the group announced it had used up all the S$8.8 billion raised from its June 2020 rights issue.

The final S$600 million went into aircraft and aircraft-related payments between 01 July 2021 and 01 September 2021.

This year, SIA also issued additional mandatory convertible bonds (MCBs) in July, which raised S$6.2 billion additional liquidity. As at mid-September, this issuance’s net proceeds had not been utilised.

Analysts believe that SIA’s current liquidity will be sufficient to tide the group over the next few years, although its recovery still hinges on global border reopenings, The Business Times (BT) reported.

DBS analysts said that ‘conservatively speaking, the group should have adequate liquidity for another few years at the very least in the worst case scenario, assuming that debt is refinanced when it is due’, BT noted.

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* Based on the Investment Trends 2018 Singapore CFD & FX Report based on a survey of over 4,500 traders and investors. Awarded the Best Online Trading Platform by Influential Brands in 2020. Awarded the best retail FX provider for Asia by FX Markets in 2020

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