My perspective: SIA doesnt look like an attractive business (even if it survives this crisis) because of the enlarged number of outstanding shares. Similarly the MCBs dont look attractive. Losses in stocks are like setbacks in life, got to take it and move on. This virus comes unexpectedly and SIA will be badly injured, cant really avoid it, it is probably easier to strike 4D than to predict that there will be a virus in 2020
You look like a long term investor. I would rather keep the cash and switch into the STI. On a relative basis, i think the other 29 companies look better than SIA, except perhaps SPH,Keppel,Sembcorp. Can also consider companies like Haw Par or Great Eastern if you intend to hold for a long time. I think the chance of better returns than SIA is higher
SIA is a business with a very high fixed cost (one of the highest amongst all industries),and in bad times like this, it is the Achilles heel. Industry-wise, while it is not a sunset industry per se, SIA has to contend with too many competitors, many of whom are willing to run big losses to subsidize its national airlines (out of strategic reasons), which SIA can ill-afford to do so.
My humble advice is to cut loss and move on...
There are many other counters out there with far greater potential and resilience (e.g. SGX, iFast, and the likes)
(14-04-2020, 11:48 PM)Curiousparty Wrote: [ -> ]SIA is a business with a very high fixed cost (one of the highest amongst all industries),and in bad times like this, it is the Achilles heel. Industry-wise, while it is not a sunset industry per se, SIA has to contend with too many competitors, many of whom are willing to run big losses to subsidize its national airlines (out of strategic reasons), which SIA can ill-afford to do so.
My humble advice is to cut loss and move on...
There are many other counters out there with far greater potential and resilience (e.g. SGX, iFast, and the likes)
Learning to cut loss was one of the best lessons, if not the best lesson, i learnt. As an OPMI, it was hard because it was my own "hard-earned money" but somehow then, i knew i had to shake off this "OPMI imperative" and learn to think like a rich person (even though not one) who is patient with his/her profits and losses.
From a portfolio perspective, the key to protecting one's capital is to learn to cut loss and prevent averaging down the wrong stocks. By learning to cut loss, it probably also simplifies the thinking process and helps to free up valuable resources (brainpower, time and capital) for other more value-added activities or companies.
Investing is actually pretty simple, but not easy.
https://www.smh.com.au/business/companie...54jlw.html
SIA owns 20% of Virgin Aus. Eitherway a G bailout or SOA, SIA will be diluted massively. If not then SIA will need to pony up cash in a cashcall.
There's also Vistara which SIA owns 49% - i doubt it's looking gr8 - SIA had already taken 200mio of impairments so far.
Strategically SIA prob will want to keep going in these 2 markets else the efforts to launch a beachhead will be wasted after all these yrs.
(15-04-2020, 10:50 AM)AQ. Wrote: [ -> ]https://www.smh.com.au/business/companie...54jlw.html
SIA owns 20% of Virgin Aus. Eitherway a G bailout or SOA, SIA will be diluted massively. If not then SIA will need to pony up cash in a cashcall.
There's also Vistara which SIA owns 49% - i doubt it's looking gr8 - SIA had already taken 200mio of impairments so far.
Strategically SIA prob will want to keep going in these 2 markets else the efforts to launch a beachhead will be wasted after all these yrs.
Didn't know virgin also has a low cost subsidiary called tigerair, is it the same as sia' tiger Air?
Look like sia majority stake in virgin going to be totally written off with the new shareholders' rescue
15 April 2020 after market closed SQ provided an update on it operation.
(click for details)
It's obvious that we had understand how bad the situation in term of SIA Group's revenues.
Although the demand for cargo/freight is held up, the reduction in passenger's operation had reduced overall cargo capacity.
Global boarder closure had caused the collapse in passenger traffic aka severe impact on it's revenue.
Despite capacity cuts and other cost management to reduce expenditure, many costs are unavoidable regardless of the number of flights mounted.
There is actually a white elephant in the room.
Due to more than 90% capacity cut, it is over-hedged w.r.t. fuel consumption.
Surplus hedges will need to be mark to market as at 31 March 2020, a date on which Brent oil price was at it's lowest point.
(click to see 31 March 2020 chart)
For those who still confused about SIA coming rights and Mandatory Conditional Bonds (MCB),
SQ published a further clarifications/FAQ on 15 Apr 2020 before market open.
(click to understands more on SQ rights and MCB)
Stay healthy and good luck.
According to SIA's update in Jan 2020, it had hedged 51% of its expected jetfuel demand for FY20/21, considering that it is unlikely international air routes will be open until July/Aug and a slow pick up in air traffic thereafter, it is likely 51% has transformed to a full 100% of its jetfuel demand.
And the price of it has paid? US$74 per barrel of jetfuel. Right now jetfuel is going at US$30. Unlike other major airlines, SIA does not have a fellow arab natural oil extraction company so it has to buy it overseas. And aided by a sense of "kiasu", it has certainly overextended itself.
Hopefully this does not dampen our kiasu spirit, because it will be put to good use when oil prices stage a rebound - hedging 51% of its jet fuel requirements at low price.
For now, Singapore will just have to suck it up with a high cost structure.
Similar to SIA hedging, Hin Leong went under instead when margin called...
https://sg.finance.yahoo.com/news/exclus...36283.html
Exclusive: Head of oil trader Hin Leong didn't disclose $800 million losses - court filing
"A drop of two-thirds in the oil price in the first three months of this year, a tightening of bank credit lines and margin calls at HLT caused a "severe depletion" of the company's cash reserves, Lim said in the filing."
(19-04-2020, 04:38 PM)CY09 Wrote: [ -> ]According to SIA's update in Jan 2020, it had hedged 51% of its expected jetfuel demand for FY20/21, considering that it is unlikely international air routes will be open until July/Aug and a slow pick up in air traffic thereafter, it is likely 51% has transformed to a full 100% of its jetfuel demand.
And the price of it has paid? US$74 per barrel of jetfuel. Right now jetfuel is going at US$30. Unlike other major airlines, SIA does not have a fellow arab natural oil extraction company so it has to buy it overseas. And aided by a sense of "kiasu", it has certainly overextended itself.
Hopefully this does not dampen our kiasu spirit, because it will be put to good use when oil prices stage a rebound - hedging 51% of its jet fuel requirements at low price.
For now, Singapore will just have to suck it up with a high cost structure.
Hedging 51% wasn't the shocker.
Hedging up 20 quarters forward is!! In AR19, the sensitivity was $141.2m for every dollar change in oil price. This number had steadily increased over the last 10 years. It used to be that hedging was 15 months forward and sensitivity was less than $10m.