Latest news with #Maybank
Business Times
17 hours ago
- Business
- Business Times
SIA sinks 7% as analysts downgrade carrier on sharp Q1 profit drop
[SINGAPORE] Shares of Singapore Airlines (SIA) dived just minutes after market open on Tuesday (Jul 29), after the national carrier posted a weak first quarter net profit on Monday. The counter dropped to S$6.94 as at 9.03 am - its lowest level in more than three weeks - with 2.6 million shares changing hands. It was down S$0.66 or nearly 8.7 per cent from Monday's closing price of S$7.60. As at 2.30 pm, it had climbed back up to S$7.06, still down by 7.1 per cent or S$0.54 from Monday's close. With some 27.9 million shares transacted, it was one of the most heavily traded counters by volume on the Singapore Exchange. SIA on Monday posted a 58.8 per cent decline in net profit, which fell to S$186 million for Q1 FY2026 ended Jun 30, from S$452 million in the year-ago period. The decline was due to lower interest income and share of losses of associates, SIA said. Analysts from Maybank and CGS International (CGSI) on Monday downgraded their calls for SIA and slashed their price targets. Maybank analyst Eric Ong downgraded the airline to 'sell' from 'hold' and lowered its target price to S$6.75 from S$6.85, noting that Air India losses weighed down SIA's earnings. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up CGSI analyst Raymond Yap downgraded SIA to 'reduce' from 'hold' and cut its target price to S$6.80 from S$6.88, recommending shareholders take profit while the carrier trades at a price-to-book-value of 1.45 times, which Yap described as 'very rich'. DBS Group Research analyst Jason Sum, however, maintained a 'hold' call and raised SIA's target price to S$6.40 from $6.30. Sum cited expectations of SIA's core earnings normalising in FY2026 and eventually improving in FY2027, as well as potential tailwinds for the carrier. Air India losses Noting that SIA's earnings missed expectations due to the 'sizeable share' of its losses for Air India - which the group holds a 25.1 per cent stake in - Yap warned that its share of losses from the associated airline could widen. Noting Air India's weak Q1 FY2026 results Yap said that its poor financial performance could persist moving forward, in light of flight cuts that followed the Jun 12 Ahmedabad plane crash - where a London-bound Air India passenger jet rammed into a medical college hostel minutes after take-off. 'While we think Air India's weak results for Q1 FY26 may have been due to one-off compensation provisions for the ... crash (its) subsequent financial performance may be weak,' Yap said. He pencilled in SIA's share of losses for Air India at S$250m for FY2026 and S$200m for FY2027, wider than previous forecasts of S$75 million. But a sharper-than-expected recovery for Air India could be an upside risk, he caveated. DBS Group Research's Sum agreed that Air India would likely remain a 'near-term drag' for SIA as the airline navigates a complex restructuring alongside reputational damage. Air India's bookings fell 20 per cent across domestic and international routes, with a noticeable rise in cancellations after the crash, Sum observed. Cargo business DBS Group Research's Sum and Maybank's Ong noted softening demand from SIA's cargo business amid trade disruptions and tariff uncertainty. 'Cargo demand appears to be under threat from the trade war (with) volume growth (having) declined to (a) 0.1 per cent year on year (increase) in Q4 FY2025,' Sum said. Both noted that that front-loading activity had previously supported cargo demand as businesses pre-empted tariffs and rushed to boost inventories. 'We believe the uncertainty over how the Trump Administration's trade policies will evolve could hold back critical business decisions that drive economic activity, and with it the demand for air cargo going forward,' Ong said. Ong added that cargo flown revenue had slipped 1.9 per cent year on year as yields deteriorated 4.4 per cent, which was 'worse than expected'. Sum expects SIA's cargo yields to decline further, which will weigh on its cargo segment. Potential tailwinds Jetstar Asia's exit could provide 'modest relief' to competitive dynamics as Scoot, SIA's low-cost arm, battles intense pricing pressure, said DBS Group Research's Sum. Maybank's Ong agreed that the Qantas-owned budget airline's closure could provide an opportunity for SIA to fill up the service gap left in its wake. He noted that SIA will ramp up capacity to various Asian destinations across Malaysia, the Philippines, Sri Lanka and Thailand, after Jetstar Asia shutters on Jul 31. Scoot will also commence operations to Labuan Bajo and Medan (Indonesia), as well as Okinawa (Japan), subject to regulatory and operational approvals, Ong said. A more benign jet fuel environment could offset margin pressures for SIA, Sum said. He expects SIA to be able to manage costs well, given lower prices for jet fuel, which usually covers 20 to 30 per cent of operating costs. Cost saving opportunities that have emerged and efficiency gains in customer service could provide further tailwinds for the airline, Sum added.
Business Times
21 hours ago
- Business
- Business Times
The greenback strengthens against Singapore dollar, reverses broad weakening trend this year
[SINGAPORE] The US dollar (USD) has climbed nearly 1.5 per cent in the past six days, reversing a downward trend that has persisted for much of this year. The US dollar index (DXY) posted a high of US$109.956 on Jan 13, but gradually weakened throughout the year to a low of US$96.776 on Jul 2. It reversed the trend in the past six days, climbing to US$98.634 as at Monday (Jul 28) for its highest close since Jul 17. For the year, however, it is still down 10.3 per cent since the high in January. 'We suspect that the broad USD revival is a quiet acknowledgement that tariffs thus far had not affected the US economy as much as feared,' said Maybank in a note on Monday (July 29). In tandem, most Asia currencies have retreated. 'With the trajectory of the greenback seemingly changing course, most Asian FX are trading on the backfoot with TWD leading in losses, followed by THB,' noted Maybank, referring to the Taiwan dollar and Thai baht. The movements in the Thai Baht took place in the aftermath of the Thailand-Cambodia conflict. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up The Singapore dollar (SGD) is no exception, with the greenback also strengthening against it this month. The USD-SGD currency pair has climbed 0.8 per cent, from S$1.2768 on Jul 23 to S$1.2868 on Jul 28. As of Tuesday (Jul 29) during Asia afternoon trading hours, it was at S$1.2862. The currency pair is still down around 5.7 per cent year to date, as of Tuesday. 'The US trade deficit is expected to stabilise in June after the blowout in Q1 FY2025 resulting from the frontloading of imports to avoid higher tariffs,' said DBS analyst Philip Wee. Eastspring Investment analysts also concurred that the easing of front-loaded imports to the US to avoid higher tariffs has eased, but warned that it would lead to 'higher US goods inflation, particularly into Q4, and lower real consumer disposable income.' Meanwhile, Maybank analysts stated in a note that the USD's rise is a 'quiet acknowledgement that tariffs thus far had not affected the US economy as much as feared', but added that it was 'premature' to assume that the tariffs have no impact on price pressure. While Wee was positive about the DXY's trend, pointing out that it closed above its 50-day moving average for the first time since February, he also cautioned that US President Donald Trump remains a 'threat' to the independence of the Fed after he stepped up attacks against Fed Chair Jerome Powell. The next Fed interest rate decision is set to take place this week on July 30. The DXY tracks the value of the greenback against a basket of currencies which include the euro, yen and British pounds. 'Today, USD could continue to rise, but the major resistance at 1.2900 may be out of reach for now,' said UOB analysts on the USD/SGD rate, adding that 'any pullback is likely to hold above the 'breakout' level of 1.2820.'
Business Times
21 hours ago
- Business
- Business Times
US dollar strengthens against Singapore dollar, reverses broad weakening trend this year
[SINGAPORE] The US dollar has climbed nearly 1.5 per cent in the past six days, reversing a downward trend that has persisted for much of this year. The US dollar index (DXY) posted a high of US$109.956 on Jan 13, but gradually weakened throughout the year to a low of US$96.776 on Jul 2. It reversed the trend in the past six days, climbing to US$98.634 as at Monday (Jul 28) for its highest close since Jul 17. For the year, however, it is still down 10.3 per cent since the high in January. 'We suspect that the broad USD revival is a quiet acknowledgement that tariffs thus far had not affected the US economy as much as feared,' said Maybank in a note on Monday (July 29). In tandem, most Asia currencies have retreated. 'With the trajectory of the greenback seemingly changing course, most Asian FX are trading on the backfoot with TWD leading in losses, followed by THB,' noted Maybank, referring to the Taiwan dollar and Thai baht. For the latter, the moves also took place in the aftermath of the Thailand-Cambodia conflict. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up The Singapore dollar is no exception, with the greenback also strengthening against it this month. The USD-SGD currency pair has climbed 0.8 per cent, from S$1.2768 on Jul 23 to S$1.2868 on Jul 28. As of Tuesday (Jul 29) during Asia afternoon trading hours, it was at S$1.2862. The currency pair is still down around 5.7 per cent year to date, as of Tuesday. 'The US trade deficit is expected to stabilize in June after the blowout in 1Q25 resulting from the frontloading of imports to avoid higher tariffs,' said DBS analyst Philip Wee. Eastspring Investment analysts also concurred that the easing of front-loaded of imports to the US to avoid higher tariffs has eased, but warned that it would lead to 'higher US goods inflation, particularly into Q4, and lower real consumer disposable income.' Meanwhile, Maybank analysts stated in a note that the USD's rise is a 'quiet acknowledgement that tariffs thus far had not affected the US economy as much as feared', but added that it was 'premature' to assume that the tariffs have no impact on price pressure. While Wee was positive about the DXY's trend, pointing out that it closed above its 50-day moving average for the first time since February, he also cautioned that US President Donald Trump remains a 'threat' to the independence of the Fed after he stepped up attacks against Fed Chair Jerome Powell. The next Fed interest rate decision is set to take place this week on July 30. The DXY tracks the value of the greenback against a basket of EUR, JPY, GBP, CAD, CHF and SEK. 'Today, USD could continue to rise, but the major resistance at 1.2900 may be out of reach for now,' said UOB analysts on the USD/SGD rate, adding that 'any pullback is likely to hold above the 'breakout' level of 1.2820.'
Business Times
21 hours ago
- Business
- Business Times
Analysts downgrade SIA, cut price targets amid lower Q1 profit, Air India losses
[SINGAPORE] Analysts downgraded their calls on Singapore Airlines (SIA) and slashed price targets for the national carrier after its profits plunged 58.8 per cent for its first quarter ended June. On Tuesday (Jul 29) morning, SIA shares dived 8.7 per cent to S$6.94 in early trade. Maybank downgraded the airline from a 'hold' to a 'sell' call, lowering its price target to S$6.75 from S$6.85 previously while CGS International (CGSI) downgraded SIA from 'hold' to 'reduce' and cut its price target to S$6.80. Citing weaker-than-expected earnings from SIA and its share of losses for Air India, which SIA owns a 25.1 per cent sake in, CGSI analyst Raymond Yap on Monday said: 'We downgrade our recommendation on SIA to reduce, and advise investors to take profit. 'SIA's share price is now trading at a historical price-to-book-value of 1.45 times, close to 3 standard deviations above the mean since 2011, which we view as very rich.' Similarly, Maybank analyst Eric Ong on Monday noted that Air India losses dragged on SIA's bottom line in spite of lower fuel prices supporting operating performance. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up 'We ... cut our FY2026 to FY2028 (estimates for) core earnings per share by 25 to 29 per cent to factor in rising non-fuel costs and weaker cargo business. We think the share price has run ahead of its fundamentals and downgrade SIA,' Ong said. Air India losses could widen SIA's share of losses from Air India could increase, CGSI's Yap said. He estimates that the losses could be S$250 million for FY2026 and S$200 million for FY2027 – wider than S$75 million previously forecast. While Air India's weak results for Q1 FY2026 – which dragged on SIA's bottom line – could have been due to one-off compensation provisions for the Jun 12 Ahmedabad plane crash, its subsequent financial performance could remain weak, Yap said. This is in light of the 15 per cent cut in Air India's wide-body international flights and 5 per cent reduction of its narrow-body flights in the immediate aftermath of the crash, Yap said, citing Reuters data. Uncertain outlook for cargo business Moving forward, SIA's demand for air cargo could be affected by tariff uncertainty, Maybank's Ong said. He observed that the carrier's air cargo demand had softened in June after previously being supported by front-loading activity as businesses pre-empted US tariffs. 'We believe the uncertainty over how the Trump Administration's trade policies will evolve could hold back critical business decisions that drive economic activity, and with it the demand for air cargo.' He noted that cargo flown revenue had slipped 1.9 per cent year on year as yields deteriorated 4.4 per cent, which was 'worse than expected'. Potential opportunity on Jetstar exit Jetstar Asia's closure on Jul 31 could present an opportunity for SIA as the group will ramp up capacity across various Asian destinations to fill the service gap after the budget airline exits, Maybank's Ong said. SIA's low-cost arm Scoot will commence operations to Labuan Bajo and Medan (Indonesia), as well as Okinawa (Japan), subject to regulatory and operational approvals, he said. Additionally, air travel demand is likely to stay healthy for Q2 FY2026 across most regions in view of the summer peak season, Ong added.
Malay Mail
2 days ago
- Business
- Malay Mail
Bursa opens higher as Wall Street rally, US earnings lift sentiment
KUALA LUMPUR, July 28 — Bursa Malaysia rebounded from last week's losses to open higher on Monday, tracking overnight gains on Wall Street. At 9.10am, the FTSE Bursa Malaysia KLCI (FBM KLCI) rose 4.03 points, or 0.26 per cent, to 1,537.79 from Friday's close of 1,533.76. The benchmark index had opened 4.29 points firmer at 1,538.05. Market breadth was positive, with gainers outpacing losers 224 to 133. A total of 293 counters were unchanged, 1,904 untraded, and 43 suspended. Turnover stood at 182.48 million shares worth RM110.09 million. Rakuten Trade Sdn Bhd equity research vice-president Thong Pak Leng said Wall Street closed broadly higher, supported by strong United States (US) corporate earnings and positive trade signals, as President Donald Trump indicated more deals could be finalised before the Aug 1 deadline. Regionally, he noted that Hong Kong's Hang Seng Index slipped on profit-taking after a five-day rally. 'Back home, we believe the market is taking a breather and is poised to resume its climb. As such, we expect the index to hover within the 1,530–1,540 range today,' he told Bernama. Among the heavyweights, Maybank rose four sen to RM9.58, Public Bank added one sen to RM4.30, CIMB and IHH Healthcare gained two sen each to RM6.77 and RM6.68 respectively, while Tenaga Nasional slipped four sen to RM13.56. On the actively traded list, YTL Corporation advanced eight sen to RM2.56, Sapura Energy edged up half-a-sen to four sen, Ekovest improved one sen to 41 sen, while NexG and TWL Holdings were flat at 52.5 sen and 2.5 sen respectively. On the broader index board, the FBM Emas Index rose 30.82 points to 11,537.64, the FBMT 100 Index gained 29.54 points to 11,299.26, and the FBM Emas Shariah Index added 21.54 points to 11,550.49. The FBM 70 Index was 43.30 points higher at 16,650.87, while the FBM ACE Index inched up 4.64 points to 4,643.66. Sector-wise, the Financial Services Index climbed 44.89 points to 17,499.12, the Industrial Products and Services Index added 0.28 of a point to 157.42, and the Energy Index rose 0.13 of a point to 739.98. The Plantation Index, however, slipped 4.36 points to 7,430.43. — Bernama
