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Hot stock: SIA shares soar in early-morning trade
SHARES of Singapore Airlines (SIA) soared in early-morning trading on Wednesday to S$12.04, up 24 Singapore cents or 2.03 per cent, as at 10.23am, making it one of the top gainers on Singapore Exchange.
The movements come after SIA confirmed on Tuesday that it is in talks to potentially acquire a stake in South Korea's budget carrier Jeju Air, which would give it a foothold in the buoyant North Asian market.
It had said that the discussions may not result in a transaction and that the airline would make further announcements as necessary.
SIA, Jeju Air and the latter's parent Aekyung Group started talks late last year over a possible stake sale, Reuters had said, quoting a Jeju Air spokesman. A report out of South Korea suggests that the stake could be in the region of 20 per cent.
The proposed acquisition comes as the SIA group - which includes regional wing SilkAir as well as budget subsidiaries Scoot and Tigerair - faces formidable competition from full-service and low-cost carriers alike, which has been putting pressure on margins.