StockTalk(6.30): Temasek sells 1.85% stake in SIA - What does it mean?
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Singapore's state investor Temasek is selling around S$400 million (US$295.92 million) worth of shares, or a 1.85% stake, in Singapore Airlines (SIA) $SIA(C6L.SG$. The shares are priced between S$7.202 and S$7.283 per share. Despite the sale, Temasek will still maintain a 53.5% stake in SIA, with Citi acting as the sole bookrunner on the share sale.
The move comes after SIA announced a record-high profit of S$2.16 billion for the year ended March 31, following three years of losses. Shares of SIA have risen almost 36% this year amid higher bookings to China, Japan, and South Korea as pandemic curbs ended globally.
Will the sale have an impact on the airline's future performance? Will we see more changes in the Singapore aviation landscape in the coming months?
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Always Hungryy : no impact. price drop naturally when you try and sell so many shares suddenly and the queue has so few people in the morning. of course it's gonna drop!
Ixy The Cat : Taking profit.
MrM : profit taking at the top. Why not? It took advantage of the travel recovery post covid. Once things normalise with recession coming, demand should taper down so will the revenue etc.
Moogoorooloo : Temasek probably thinks SIA is overvalued at the moment. 1.85% is just a small percentage of its holdings in the company. If I'm not wrong, Temasek has lots of the Rights 2021 Mandatory Convertible Bonds that it scooped up because few investors wanted to subscribe to the bond at the height of the Covid pandemic. Those bonds have a conversion price of less than $5 per share. So selling at $7+ and paying $4+ to get it back actually seems like a good idea.
1122杰 : Buy low and sell high, normal
Cookie Jar Fund : it just means the upside is limited and there are better opportunities with bigger upside elsewhere
Kopikarp : The sale of Temasek's stake is unlikely to directly impact the airline's operational performance. However, it may influence investor confidence. The future performance of Singapore Airlines is more dependent on factors such as the easing of COVID-19 travel restrictions, demand recovery, fuel costs, and competition. In the coming months, changes in the Singapore aviation landscape are expected due to fluctuating COVID-19 situations, particularly in China, and evolving market dynamics, potentially leading to increased competition and pressure on yields.
ZnWC : I see the selling as Temasek trying to re-balance its portfolio. Temasek is still the major shareholder in SIA with a 53.5 per cent stake. In short term, Temasek's sale may cause some panic selling but swing traders may see an opportunity to buy at dip.
At the 2023 Skytrax World Airline Awards ceremony, held on June 20, 2023, SIA has taken over the top spot from Qatar Airways after being ranked the world’s best. The airline has also received titles for Best First Class, Best First Class Seat, Best First Class Comfort Amenities and Best Airline. The airline’s budget arm, Scoot was named the Best Long-Haul Low-Cost Airline.
Despite few commented the SIA's stock is overbought, the share price still remains above SGD 7 and about 40% gain YTD. UOBKH raised the target price to SGD 7.07. I see growth potential in the company as she tries to set the airline service apart from its rivals.
杰曼 : it's peanut, just to get some cash back to fund other better ventures or unicorn, but still need to maintain control over the local company
user1238474573 : Price drops after any big announcement, followed by a rise back to average levels.
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