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STOCKS NEWS SINGAPORE-OCBC upgrades Tiger Air to buy
OCBC Investment Research upgraded Singapore's Tiger Airways Holdings Ltd to 'buy' from 'hold' and raised its target price to S$0.76 from S$0.67, citing lower jet fuel prices and expected improvement in the budget carrier's operations.
Tiger shares were up 2.2 percent at S$0.685 and have risen nearly 8 percent so far this year.
OCBC said Tiger is likely to benefit from the current respite in jet fuel prices, especially with fuel cost contributing to more than 40 percent of its operating costs.
OCBC estimated that Tiger can achieve around S$5 million ($3.9 million) of savings in fuel costs in the first quarter of 2013 fiscal year, given the 7 percent quarter-on-quarter fall in average jet fuel prices.
With Tiger's Australian unit flying more sectors and lowering its unit fixed cost and Tiger Singapore more focused on improving yields and load factors, the budget carrier's profitability is poised to considerably improve in 2013, OCBC said.
0930 (0130 GMT)
(Reporting by Eveline Danubrata in Singapore; email@example.com) ($1 = 1.2804 Singapore dollars)
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