SIA share price nearing 20-year low

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What a perfect storm for SIA share price! Amid the coronavirus outbreak, SIA share price plunged to $8.00, a level not seen during the dark days of the Great Financial Crisis in 2009. To put things into perspective, even during the SARS in 2003, the lowest point for SIA share price was $8.30. And that was 2003. If you factor in the inflation rate, the present SIA price reflected how badly the national carrier had been hit by this black swan event.

SIA share price in crisis mode

SIA share price in moment of madness

SIA share price

Will SIA share price plummet to $7.50, the level it was trading in 2001? That was the period when US suffered the 9/11 terrorism attacks. On the basis of the current run of SIA share price, it seems like so. The reason for the difference between 2003 and the current situation is that the China traveller market had become a major revenue contributor for the SIA Group. Given that China is at the epicentre of the outbreak, SIA’s business is impacted for sure.

Another reason why SIA share price is in for a huge bout of volatility is the fact that the coronavirus is much more infectious than SARS. Besides China, countries like South Korea, Italy and Iran are also hit significantly by the virus. Globally, the virus has also spread to many countries, resulting in plenty of travel restrictions imposed by various governments. Being an airline operating in an aviation hub, the latest development is certainly bad.

Question now is: is it the right time and right place to buy SIA share? With a Price/Book Value of 0.787, SIA share price is currently trading below its book value. P/E ratio of 13% is also very attractive. With Temasek Holdings having a stake of 55%, this counter also enjoys a strong institutional support.

Note that this is an opinion article and not meant to be a financial advice. Please do your due diligence or engage financial advisors before investing in the stock market. Furthermore, I am not vested and have never invested in SIA before. Whether SIA share price will surge or collapse has no impact on me. Thus, this article is not meant to induce readers to make any form of investment decisions.


SIA share price yet to see bottom?

Given the abysmal SIA share price performance, it is not the management’ style to conduct shares buyback to shore up investor’s confidence. The last shares buyback was done in September 2016. Presumably, the management prefers to conserve cash to buy aircraft and enhance capacity for growth.

The moment of revelation for SIA share price will arrive when [This is a premium article. The rest of the content is blocked and can be accessible by SG Wealth Builder Members only. To read the full content, please sign up as member.]

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