Tiger Air

Tiger Air: the budget carrier said last night it wasn't aware of any reasons for a sharp spike in the price of its shares. But said it continually reviews proposals, including financing, to strengthen its performance or strategic position, though it has made no decision on pursuing any such proposal.

Yday, the SGX queried Tiger on its "substantial increase" in share price, after the counter surged 13.5% to close at $1.135, rebounding from a recent slump that followed the Jul 2 decision by Australia's aviation safety regulators to ground the airline till Aug 1.

Market watchers have mooted various reasons to explain the share price rise, which include
i) CIMB’s technical Buy call issued that morning,
ii) possible agreement by Australian authorities to lift Tiger’s flight ban (unconfirmed),
iii) possible stake increase by SIA. Meanwhile SIA said no decision has been made about a change in its sh/h in Tiger.

(Update)
As of this morning, CIMB has new Trading Sell this morning. Says it is obvious that a fund bought into Tiger, though the identities of parties involved are not known yet. Reiterates it has advocated a wait-and-see approach and will only be comfortable getting into the stock once a revival is clear.

Recommends to stay away from Tiger for now. Maintains its cautious stance and reiterates Trading Sell recommendation with TP $0.71 (6x CY12 P/E) but adds it could re-rate Tiger on
i) Thai-Tiger’s approval;
ii) oil price weakness
iii) signs of turnaround in Australia.

Stock -4% at $1.09, on strong volume.

Technically yday’s long green candle provides a positive signal, and has led to a reversal of key indicators out of oversold levels. Failure to significantly break the $1 support level suggests that prices may have bottomed out. Expect volatile trading in the near term. Support at $1.04, resistance at $1.19.