SIA

SIA: Qantas Airways has received approval from EDB to establish a premium subsidiary carrier in S’pore despite intense lobbying campaign from SIA opposing the plan. If Qantas succeeds in staging more flights out of S’pore, it will certainly lead to greater competition for the Spore’s flag carrier in its own backyard while the Australian carrier continues to block SIA’s advances Down Under, seeking for rights to fly beyond Australian points to the US.

Meanwhile, India’s industry ministry has recommended that foreign airlines be allowed to buy as much as 26% stake in the nation’s domestic carriers. This could offer an opportunistic acqn for SIA to penetrate the large Indian market although we must caution that any tie-up may face regulatory and operational hurdles and may not yield results as was the case with its 40% stake in Virgin Atlantic.

Stock is currently trading at the bottom end of an upward trend channel with technical indictors pointing to a possible rebound if it can hold above the 50 DMA at $11.03