SIA

SIA: StanChart expects higher global GDP growth in 2014 coupled with stronger Asia exports, which should support the continued recovery of global business travel. However, in Singapore, LCC competition is not easing and SIA’s passenger yield on short-haul routes is expected to continually being pressured in the short run. At the same time, SIA might lose market share to Middle Eastern carriers on its profitable premium class Kangaroo routes, and the house expects SIA could find it difficult to boost premium passenger yield. Despite the expected demand recovery, SIA faces its own headwinds and yield and profits is expected to recover later than Cathay’s given the former faces greater competition from Middle Eastern carriers and LCCs. StanChart upgrades SIA to in-line (from U/PF) with target price of $11.00 (from $10.80)