SIA

SIA: Following yesterday’s announcement of the JV between Nok and Scoot, CIMB suggested that SIA’s cash reserves could be used for business expansion during tough times such as these. CIMB’s opinion is that if managed properly, this JV could be similar to how AirAsia X brings traffic to AirAsia. However, more scale will be needed before the JV can effectively compete with more established low-cost brands. That said, CIMB underscores competitive pressures from Middle Eastern and Low Cost Carriers to weigh on earnings, hence keeps rating unchanged at Hold and a TP of $10.50