Broker: iFAST Financial Pte Ltd
Date of Report: 20 May 2026
Excerpt from iFAST Financial Pte Ltd report.
Report Summary
- Action: Hold – Singapore Airlines (SIA) bonds are recommended as a hold despite anticipated turbulence from higher fuel costs.
- Highlights:
- SIA’s FY2025/26 core operations remain strong; operating profit rose 39% to S\$2.4b on record revenue of S\$20.5b.
- Balance sheet strengthened: Net debt to equity improved to 0.16x, and liquidity remains robust.
- Primary risk is fuel cost escalation due to Middle East conflict; hedging protection will decline in H2 FY2026/27, potentially compressing margins.
- Management is responding with fare increases and network expansion toward Europe to capture rerouted demand.
- SIA SGD bonds: Yield-to-maturity ranges from 1.41% to 2.54%, offering a 10–40bps spread over Singapore treasuries. Fairly priced.
- SIA USD bonds: Yield-to-maturity ranges from 4.26% to 5.07%, offering ~60bps spread over US treasuries. Better relative value compared to SGD bonds.
- Key Idea: SIA’s solid financial profile, liquidity, and implicit sovereign support make its bonds resilient despite rising fuel costs. Investors seeking yield may prefer SIA’s USD bonds for better relative value.
Above is an excerpt from a report by iFAST Financial Pte Ltd. Clients of iFAST Financial Pte Ltd can be the first to access the full report from the iFAST website: https://secure.fundsupermart.com/fsmone/policies/328125/investment-account-terms-&-conditions
