Singapore Airlines soars to 6-month high as a Covid-19 vaccine looks increasingly likely

• Singapore Airlines saw its share price rebound 11% this week following positive Covid-19 vaccine developments
• The stock hit a six-month high price of S$4.66 a share on Wednesday
• Singapore’s national carrier also launched and priced S$500 million worth of 3.5% notes as part of an enlarged medium-term note programme
• Analysts polled by Refinitiv have given the blue-chip stock a 12-month target price of S$3.87

Singapore Airlines share price: What’s the latest?

Singapore Airlines’ (SIA) share price soared nearly 11% this week, as market optimism surrounding a Covid-19 vaccine continued to pick up pace.

The stock hit a six-month high price of S$4.66 on Wednesday 25 November 2020, before easing to a current price of S$4.48 a share.

Singapore’s flagship carrier also saw a spike in its trade volume this week. The stock registered over 100 million trades between Monday and Thursday, as compared to roughly 77 million trades across the whole of last week (ending 20 November).

S$500 million worth of notes launched this week

Earlier this week, SIA also launched and priced S$500 million worth of 3.5% notes as part of its multi-currency medium-term note programme (recently raised from S$5 billion to S$10 billion).

The notes, expected to be issued on 02 December 2020 at a price of 100% of their principal amount and in denominations of S$250,000, will bear interest at a fixed rate of 3.5% per annum payable semi-annually in arrear.

The notes will have a maturity date of 02 December 2030.

This latest bond issue brings the total amount of cash raised by SIA since FY2021 began to roughly S$12.7 billion.

Meanwhile, on the operating front, the group reported a 98.1% year-on-year decline in passenger carriage in October 2020, as ‘border controls and travel restrictions remained in place in most countries to curb the spread of Covid-19’.

Where do analysts see SIA in the next 12 months?

The SIA stock currently has a 12-month share target price of S$3.87 from analysts polled by Refinitiv.

CIMB analysts were the most optimistic, giving a target price of S$4.57 a share and an ‘add’ rating.

Their price case was made based on the stock’s ‘improving risk-reward’, alongside the fact that ‘downside surprises are limited with aircraft assets already impaired and equity raising already complete’.

The most bearish outlook came from DBS, rating the stock a ‘hold’ with a lower share price target of S$3.60.

The analysts cited SIA’s interim loss of S$3.5 billion and a delayed recovery path due to a second wave of Covid-19 infections in the US and Europe as key factors for their lower forecasts.

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