SINGAPORE (Jan 15): UOB Kay Hian is upgrading Singapore Airlines to "buy" from "hold" with a $14.00 target, saying the market hasn't factored in the positive impact on the airline from lower fuel prices.

Investors appear to be “unduly worried” about mark-to-market losses and falling yields, or revenue per passenger per kilometre flown.

UOB lowers its average jet fuel cost estimate from US$68 a barrel to US$58 a barrel this year. According to UOB's estimates, every US$10 per barrel reduction in fuel prices adds $570 million to the airline's profit before tax.

To continue reading,

Sign in to access this Premium article.

Subscription entitlements:

Less than $9 per month
3 Simultaneous logins across all devices
Unlimited access to latest and premium articles
Bonus unlimited access to online articles and virtual newspaper on The Edge Malaysia (single login)

Stay updated with Singapore corporate news stories for FREE

Follow our Telegram | Facebook