SIA down 0.3%; Talks to sell Virgin Atlantic stake

While Singapore Airlines' talks to sell its 49% Virgin Atlantic stake aren't too surprising given the carrier's previous comments, 'the question most people would have is timing. Why sell it now given airline valuations are cheap,' asks Andrew Orchard, an analyst at CIMB. The move likely doesn't mark a major strategy change, he says. 'Under the current CEO, you've already seen some of a refocus toward its key markets,' such as intra-Asia routes and the long-haul kangaroo route; 'it could be seen as an extension of that,' he says. But he notes, SIA bought the stake on expectations it would be able to fly London-New York. 'Obviously, that hasn't happened,' he says. While SIA isn't giving up on Europe, 'they are giving up on connectivity between London and the US' The stock is down 0.3% at S$10.68 in slim volume, remaining within recent trading ranges. Orderbook quotes suggest the stock may slip a tad more.