What’s the latest on SIA shares ahead of end-July AGM?

National carrier Singapore Airlines (SIA) Group has announced that its annual general meeting (AGM) will be held entirely via electronic means on 27 July 2020.

‘Due to the current Covid-19 situation in Singapore, shareholders will not be allowed to attend the AGM in person,’ the group said in a circular posted on Friday 03 July 2020.

Following the announcement, the group’s share price rose 0.8% in the first 30 minutes of the session. As at 14:15 SGT on Friday, SIA stocks are trading at S$3.86 per share.

IG data also showed that 'buys' made up 72% of all trades on the SIA counter this week. Some 94% of IG client accounts with open positions in the SIA market expect the price to rise, with 6% of all open positions expecting the price to drop.

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Singapore Airlines’ AGM to be conducted via webcast, audio stream

The AGM will be conducted via a live audio-visual webcast or live audio-only stream at 10:00 SGT, in line with the Singapore government’s COVID-19 (Temporary Measures) Act 2020 and the corresponding alternative arrangements for company meetings.

The act enables the Minister for Law by order to prescribe alternative arrangements for listed companies in Singapore to, inter alia, conduct general meetings, either wholly or partly, by electronic communication, video conferencing, teleconferencing or other electronic means.

The company’s Chairman, Mr Peter Seah Lim Huat, and Chief Executive Officer, Mr Goh Choon Phong, will conduct the proceedings of the AGM by way of electronic means.

Central Provident Fund or Supplementary Retirement Scheme investors who wish to appoint the Chairman of the Meeting as proxy to vote must approach their respective CPF Agent Banks or SRS Operators to submit their votes by 17:00 SGT on 15 July 2020.

Pending business resolutions, including additional bonds

Ordinary business resolutions to be passed during this 48th AGM include: To receive and adopt the Directors’ Statement and Audited Financial Statements for the year ended 31 March 2020; as well as to approve Directors’ remuneration of up to S$2 million for the financial year ending 31 March 2021 (FY2019/20: up to S$2.4 million).

Special business resolutions to be passed include the issuance of up to S$6.2 billion in aggregate principal amount of additional mandatory convertible bonds, on terms that are substantially similar to that set out in Appendix 2 of the circular to company shareholders dated 15 April 2020.

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SIA cancels flights from Singapore to Melbourne

A day earlier on Thursday 02 July 2020, the airline also said it will no longer be operating passenger services from Singapore to Melbourne from 01 July to 14 July, according to a notice posted on its website.

SIA said this was due to new restrictions imposed by the Australian government. On 01 July, the Victorian government enacted stay-home measures for an estimated 311,000 residents living in 10 postal codes, after a new wave of Covid-19 cases were recorded.

However, flights from Melbourne to Singapore for the same two week period will continue to operate as listed.

‘We apologise to customers affected by these changes and will work with them to make alternate travel arrangements,’ the airline stated.

UOB analysts downgraded SIA stock rating to ‘sell’

Two weeks ago, United Overseas Bank (UOB) equity researchers downgraded their ratings for the SIA stock to a ‘sell’.

They recommended that investors take profit on the stock, as they estimated that the airline is likely to experience a 58% traffic decline for the 2021 financial year, up from their initial projection of 45%.

They also lowered their 12-month price target on the SIA stock to S$3.80, down from S$4.13 a share previously.

UOB explained that ‘while the general expectation is for traffic to recover only in FY22, there is significant uncertainty over the extent of decline in traffic and load factors, and consequently the extent of cash burn in our view’.

Furthermore, they noted that the SIA group is likely to require additional funding – on top of the S$8.8 billion raised in a recent rights issue – if it does not defer planned aircraft deliveries and payments.

How to trade SIA shares with IG

Are you feeling bullish or bearish on Singapore Airlines (SIA) and other Straits Times Index (STI Index) 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:

• Create a live or demo IG Trading Account or log in to your existing account
• Enter <Singapore Airlines Ltd> or <C6L> in the search bar and select it
• Choose your position size
• Click on ‘buy’ or ‘sell’ in the deal ticket
• Confirm the trade