SIA share price (SGX: C6L) so bad its good!

Chinese New Year Special Offer! What a roller coaster ride for SIA investors! From a high of $5.55 on 15 October, SIA share price languished to $5.00 following the torpedo from Omicron variant. Due to the countless twists and turns of the pandemic saga, analyzing the outlook of SIA share price is always a tricky business. Prior to the arrival of Omicron, SIA share price was in bullish form due to the launch of a slew of Vaccinated Travel Lanes (VTLs) with countries in US and Europe. And then Omicron emerged out of nowhere to wretch the form of SIA share price. Should investors run for their lives?

SIA share price

When news of Omicron broke, SIA share price took a hit as the market initially did not have a sense of how deadly or contagious this variant is. The fear then was that Omicron could lead to another wave of crippling lockdowns and borders’ restrictions among countries. The knee jerk reactions could be forgiven due to the lack of data. But recent release by health authorities suggested that this variant may not be as deadly as the Delta variant. In addition to that, Pfizer has claimed that three shots of its vaccines could neutralize Omicron variant based on laboratory tests.

SIA share price in explosive form

SIA share price (SGX: C6L) faces ambush from another cash call?

SIA share price rises from ashes

For SIA investors, the carnage of SIA share price must be déjà vu. During the peak of the Delta outbreak, the counter also collapsed, falling from $5.70 in early April to a low of $4.50 in May. So the recent correction of SIA should not be surprising. Obviously, short-selling activities played a major part in the collapse of SIA share price. From data extracted from SGX website, below is the data concerning short selling activities on SIA shares.

PeriodShort Sale VolumeShort Sale Value
29 Nov to 3 Dec36.5 million$177 million
22 Nov to 26 Nov15.6 million$81 million
15 Nov to 19 Nov13.5 million$72.2 million
8 Nov to 12 Nov9.5 million$51.7 million
1 Nov to 5 Nov3.9 million$20 million

Source: SGX

As can be gleaned from the above data, the volume of short sale volume surged from 3.9 million in early November to a staggering 36.5 million in end of November. This represented a staggering increase of almost 10 times. In recent years short sellers have been very active targeting Straits Times Index (STI) components (SIA is one of the STI components). This is because since November 2019, SGX has lowered the borrowing rates for institutional investors to borrow. As of 9 December, the borrowing rate for SIA shares is just 0.25% (prior to the change, the borrowing rate used to be 6%)!

Despite the slew of VTLs, it seems to me that the big boys are not biting the bait. Throughout the year of 2021, the largest upswing in SIA share price occurred in February 2021. That was when SIA got into the top ten institutional net buy list, with $133 million worth of shares being net bought. The buying interest from institutional players sent SIA share price roaring from $4.10 in January to a giddy high of $5.70 in March.

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 (SGX: C6L) will surge or collapse has no impact on me. Thus, this article is not meant to induce readers or subscribers to make any form of investment decisions.

SIA share price to take off in 2022?

In investing, you must buy low and sell high. The current form of SIA share price may represent good opportunity to enter or accumulate because the narrative for this counter is likely to change in 2022. Evidently, the support from the big boys is important in order for SIA share price to take off. In 2021, we have seen SIA share price recovered to the $5 mark from the low of $3.50 in 2020. The roll out of vaccine had ignited the rally of SIA share price. In early 2022, we could see SIA share price hitting [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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Updated: December 12, 2021 — 11:40 pm

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