CGS-CIMG analyst Raymond Yap has upgraded Singapore Airlines (SIA) to “add” from “hold” previously as he feels downside surprises to the airline are “limited’ due to its already impaired aircraft assets and completed equity capital raising exercise.

The upgrade also comes as SIA’s improving risk-reward owing to the group’s strong balance sheet, the Singapore government’s efforts to open borders and the potential introduction of a Covid-19 vaccine in 2021.

On June 8, SIA completed its $5.3 billion rights issue and issued its $3.5 billion mandatory convertible bonds (MCB) with a conversion price of $4.84.

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