SIA down 3% amid layoffs, AEM jumps 11%, USD/SGD slides

Friday market wrap: Singapore Airlines announces 4,300 job cuts, AEM raises revenue forecast by 4%, USD/SGD down three pips as risk-on mood returns.

AEM soars 10.6% on higher revenue forecast

Shares of AEM Holdings (SGX: AWX) soared as much as 10.6% on Friday, a day after the group raised its revenue guidance for the full 2020 financial year.

The stock rose to an intraday high of S$3.66 at 11:35 SGT on Friday 11 September 2020.

AEM’s board of directors stated in an SGX filing on Thursday 10 September 2020 it is revising its FY2020 revenue guidance upwards to be between S$480 million to S$500 million, based on the sales orders visibility and the business outlook going forward.

The new guidance represents a roughly 4% increase from its previous estimates of between S$460 and S$480 million provided on 03 August 2020.

Meanwhile, capital expenditure is expected to remain unchanged at about S$4 million.

Following the guidance revision, Maybank analysts on Friday raised their AEM target price by 19% to S$5.05, up from S$4.04 previously. Rating remained unchanged at ‘buy’.

The stock currently has a mean 12-month target price of S$4.56, according to Refinitiv analyst ratings. ­­­­­This represents a potential stock upside of 24.6%.

Ready to trade Singapore stocks?

CFDs allow you to buy (long) or sell (short) Singapore-listed shares without trading the underlying assets. Open a live or demo account with IG now.

SIA share price down 3% amid layoff exercise

Singapore Airlines (SIA) Group (SGX: C6L) announced on Thursday that it would cut around 4,300 positions across its three airlines – flagship carrier SIA, regional arm SilkAir and low-cost wing Scoot.

SIA’s share price is down 3% this week. Shares are trading at S$3.53 as at 14:30 SGT on 11 September 2020.

The stock currently has an average 12-month target price of S$3.41 a share from 11 analysts polled by Bloomberg, as of 10 September 2020. This represents a downside of 3.4% from the last traded price.

Eight brokers have rated the stock a ‘hold’, while four gave ‘sell’ recommendations.

The potential number of staff impacted could be reduced to about 2,400 in Singapore and in overseas stations, after taking into account various cost-cutting measures implemented earlier, the group said.

These include a recruitment freeze (conducted in March 2020), natural attrition, open vacancies that were not filled, an early retirement scheme for ground staff and pilots, and a voluntary release scheme for cabin crew.

Collectively, these measures have allowed the group to eliminate some 1,900 positions thus far, the airline added.

USD to SGD slides as US stock futures gain

The USD/SGD is turning lower again, as risk-on sentiments appeared to return (evident by US stock futures’ uptick) on Friday 11 September 2020.

As at 15:15 SGT, the USD to SGD exchange rate stands at S$1.36652 – down nearly three pips from an intraday high of S$1.37022 recorded at 05:30 SGT.

S&P 500, Nasdaq 100 and Dow Jones futures are up 0.78%, 1.13% and 0.57% respectively on Friday morning.

DailyFX analyst Daniel Moss wrote that a ‘wait-and-see’ monetary policy approach by the European Central Bank a day earlier could also ‘hamper the potential upside’ of the US Dollar Index.

OCBC FX Strategist Terence Wu said he expects the FX Sentiment Index to ‘stay choppy within the Risk-On zone’ going forward.

‘Overall, risk appetite may be undergoing a stage of flux, especially equities still tussling around support levels,’ he wrote.

How to trade stocks and forex with IG

Are you feeling bullish or bearish on the USD/SGD, as well as the AEM and SIA stocks?

Either way you can buy (long) or sell (short) the asset using derivatives like CFDs offered on IG's industry-leading trading platform in a few easy steps:

  1. Create a live or demo IG Trading Account, or log in to your existing account
  2. Enter <USD/SGD> or <Singapore Airlines Ltd> in the search bar and select the instrument
  3. Choose your position size
  4. Click on ‘buy’ or ‘sell’ in the deal ticket
  5. Confirm the trade

IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

The information/research herein is prepared by IG Asia Pte Ltd (IGA) and its foreign affiliated companies (collectively known as the IG Group) and is intended for general circulation only. It does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit.

Please see important Research Disclaimer.

Live prices on most popular markets

  • Forex
  • Shares
  • Indices
Sell
Buy
Updated
Change
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Sell
Buy
Updated
Change

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.

Sell
Buy
Updated
Change
-
-
-
-
-
-
-
-
-
-
-
-
China 300
-
-
-
-

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 20 mins.

The Momentum Report

Get the week’s momentum report sent directly to your inbox every Monday for FREE. The Week Ahead gives you a full calendar of upcoming key events to monitor in the coming week, as well as commentary and insight from our expert analysts on the major indices to watch.

For more info on how we might use your data, see our privacy notice and access policy and privacy webpage.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.