SIA share price should be $3.03 rather than the $4.11 that it is now.
Share price should hover around $3 lah, that is why they priced the SIA rights at $3 and also why the MCB is priced to convert to an SIA share at $2.68 worth of MCB at inception.
(ideal scenario for MCB holders is for them to get one SIA share worth $4.84 in June 2030 for $2.68 paid into MCB program in June 2020).
Obviously the ideal target SIA share price (inclusive of all dividends for the prior 10 years) at June 2030 is $4.84 (conversion price of MCB to SIA shares after MCB has accrued 10 years worth of interest).
This way, BOTH MCB holders and SIA share holders are both happy.
MCB if paid in shares or interest would have obtained 6% p.a. compound Interest for 10 years till June 2030, SIA share holders would have seen their rights shares, originally bought for $3 appreciated by 1.049% p.a.
Thus, ideally the SIA share price now should be approx 1.025x$3= $3.08 or so.
Real BVPS of SIA is now $3.57 nia (when u count MCB as equity and dilute BVPS by the number of new SIA shares converted from the $3.5B MCB default conversion programme).
At 85% P/BVPS, amount is $3.0345, which is somewhat a bit lower than my proposed $3.08 based on linear appreciation of SIA rights shares from their $3 rights issue price. (maybe better to be humble and accept $3.04 as the ideal price as we focus fight against covid-19 which still has the upperhand).
Of course some people say that my calculations didn't consider how cheap SIA can now borrow money cos Singapore gahmen just like FED is printing much money, dropped interest rates blah blah but there is also more instability in economy now, just like Capitol Hill in USA kena insurrection mob attack organised by sitting president Dotard, so can an SIA plane kena hijacked for some crazy extremists reason and kill everyone on board. Thus the share price of Airlines might also shoot around wildly but best for gahmen to be hands off, let the share price slowly increase from $3 to $4.84 over 10 years, rather than get attacked due to excessive gahmen intervention (just like the Reddit mob attacked ('short squeezed') the flamboyant hedge fund managers who excessively short gamestop shares and made the gamestop share price shoot up 400% and made the hedge funds lose billions of $$$on their short positions.
In reverse to the Gamestop phenomenon, political turmoil will follow in Singapore if it is found that government is doing what the Reddit mob did by using tax payers money to bail out SIA (/inflate share price excessively) and also bring more inequality and covid-19 to Singapore shores.
From:
https://www.singaporeair.com/saar5/...inancial-Results/News-Release/nr-q2fy2021.pdf
Hi Heartyman,Heartyman (HWZ) said:
Share price should hover around $3 lah, that is why they priced the SIA rights at $3 and also why the MCB is priced to convert to an SIA share at $2.68 worth of MCB at inception.
(ideal scenario for MCB holders is for them to get one SIA share worth $4.84 in June 2030 for $2.68 paid into MCB program in June 2020).
Obviously the ideal target SIA share price (inclusive of all dividends for the prior 10 years) at June 2030 is $4.84 (conversion price of MCB to SIA shares after MCB has accrued 10 years worth of interest).
This way, BOTH MCB holders and SIA share holders are both happy.
MCB if paid in shares or interest would have obtained 6% p.a. compound Interest for 10 years till June 2030, SIA share holders would have seen their rights shares, originally bought for $3 appreciated by 1.049% p.a.
Thus, ideally the SIA share price now should be approx 1.025x$3= $3.08 or so.
Real BVPS of SIA is now $3.57 nia (when u count MCB as equity and dilute BVPS by the number of new SIA shares converted from the $3.5B MCB default conversion programme).
At 85% P/BVPS, amount is $3.0345, which is somewhat a bit lower than my proposed $3.08 based on linear appreciation of SIA rights shares from their $3 rights issue price. (maybe better to be humble and accept $3.04 as the ideal price as we focus fight against covid-19 which still has the upperhand).
Of course some people say that my calculations didn't consider how cheap SIA can now borrow money cos Singapore gahmen just like FED is printing much money, dropped interest rates blah blah but there is also more instability in economy now, just like Capitol Hill in USA kena insurrection mob attack organised by sitting president Dotard, so can an SIA plane kena hijacked for some crazy extremists reason and kill everyone on board. Thus the share price of Airlines might also shoot around wildly but best for gahmen to be hands off, let the share price slowly increase from $3 to $4.84 over 10 years, rather than get attacked due to excessive gahmen intervention (just like the Reddit mob attacked ('short squeezed') the flamboyant hedge fund managers who excessively short gamestop shares and made the gamestop share price shoot up 400% and made the hedge funds lose billions of $$$on their short positions.
In reverse to the Gamestop phenomenon, political turmoil will follow in Singapore if it is found that government is doing what the Reddit mob did by using tax payers money to bail out SIA (/inflate share price excessively) and also bring more inequality and covid-19 to Singapore shores.
From:
https://www.singaporeair.com/saar5/...inancial-Results/News-Release/nr-q2fy2021.pdf
