SIA shares fall to record low ahead of results release

This is the flag carrier's worst showing since 1990, when it declined to $3.2509 on a rights-adjusted basis.
This is the flag carrier's worst showing since 1990, when it declined to $3.2509 on a rights-adjusted basis.PHOTO: OUTBACK PHOTOGRAPHICS

SINGAPORE (THE BUSINESS TIMES) - Singapore Airlines' (SIA) share price touched a 30-year low on Thursday (May 14), sinking 6.5 per cent or $0.26 to $3.74 by the midday break.

About 16.6 million shares had changed hands, making the counter the most active by value on the Singapore bourse.

This is the flag carrier's worst showing since 1990, when it declined to S$3.2509 on a rights-adjusted basis.

Meanwhile, its share rights, under the $8.8 billion cash call, sank $0.285 or 30 per cent from the previous day's closing price to trade at $0.665 as at the midday break on Thursday. About 30.7 million of these securities had changed hands during the morning session.

The SIA share rights first traded at $1.01 during the pre-open session on Wednesday, under the name SIA R and code LRDR, Shareinvestor data showed. The issue price for the rights shares will be $3 apiece.

Besides the rights shares, SIA will also issue rights mandatory convertible bonds (MCBs) as part of its fundraising. The MCB rights were trading at 0.2 Singapore cent by the midday break on Thursday, down 0.3 cent or 60 per cent from the previous day's close. The counter was the most heavily traded by volume on the Singapore bourse, with 126.6 million units changing hands.

The MCB rights first opened at 0.1 cent on Wednesday, under the name SIA MCB R and code GANR, according to Shareinvestor data. The issue price for the rights MCBs will be $1 for each $1 in principal amount of the rights MCBs.

The share and MCB rights will trade till 5pm on May 21. Investors who wish to exercise their rights must do so by 5pm on May 28.

On Thursday after trading hours, SIA is set to announce its full-year financial results for the year ended March 31, 2020. It expects to report a small operating profit but a net loss - its first yearly loss ever - for the 12 months, mainly owing to its fuel-hedging losses, the airline group said last week.

But the losses may not end there, some analysts have said. They believe another loss-making year could be possible given the "staggering" crash in the April-June quarter when there were virtually no flights.

On Wednesday, SIA chief executive Goh Choon Phong described the coronavirus pandemic as the greatest challenge ever faced by the aviation industry. In a dialogue with the Securities Investors Association (Singapore), Mr Goh said that the industry is likely to remain highly competitive even after the crisis blows over.

 

As for the 5x Short SIA daily leverage certificates (DLCs), Societe Generale (SocGen) is extending a single exceptional payment of $0.30 per DLC to investors as a "goodwill gesture", after some of them protested against what they saw as the lack of timely disclosure and unfair pricing by the investment bank.

The Singapore Exchange has also commenced investigations into the matter.

Traders of the 5x Short SIA DLCs complained last week when SocGen adjusted the pricing below what they had expected, by taking into account both SIA's rights issue and MCB issue. The DLCs last traded at $0.81 before they were suspended on May 6, after their value fell rapidly to zero when the underlying SIA shares surged more than 20 per cent upon trading ex-rights.