Investors who have been smiling at CapitaMalls Asia’s sparkling debut (up 8.5% first day) and continued rise of more than 25% since its Nov 25 listing, now see another possibility with the reportedly soon-to-be-lodged IPO of budget carrier Tiger Airways.

Full-service airlines remain mired in losses and are flying below average premium passenger loads but budget carriers in Asia have fared better, with their low-cost operating structure and ability to pass on fuel and other service surcharges to passengers.

Tiger Airways Holdings, 49% owned by Singapore Airlines, is said to be aiming to raise $200 million. Bloomberg newswire says Tiger may lodge the offer as early as Dec 21 next week. Citigroup Inc., Morgan Stanley and DBS Group Holdings are mandated to manage the sale.

The carrier aims to price the shares in mid-January and plans for a listing in February, the news agency quoted a source. The initial share sale will value Tiger, which began flying in September 2004, at between $725 million and $910 million, according to the document.

By comparison, Air Asia Bhd, the only discount carrier in Southeast Asia that is listed (and which is also said to be considering listing its separate JV air carrier subsidiaries in Thailand and Indonesia) is valued at RM3.64 billion ($1.5 billion).

The market this week has been listless, awaiting signals from the US Federal Reserve Open Market Committee’s two-day meeting that starts today, while digesting uncertain news from Dubai, continued sovereign debt downgrades (Mexico was the latest) and China’s curbs on its property boom.

Meanwhile, news that The Abu Dhabi Investment Authority (ADIA) is trying to abort an agreement to buy US$7.5 billion ($10.5 billion) of Citigroup Inc. stock at eight times today’s price, saying the bank misled it about the investment, shows the tussle between shareholders and the management of bailed-out banks who are diluting the company’s worth as they issue shares to get out of state control (and better control their compensation packages, critics say) earlier.

Sovereign Wealth Funds like Singapore’s GIC and ADIA had helped saved Citigroup earlier when they needed funds during the credit crunch. They will now suffer dilution in their investments unless they top up since Citigroup announced on Dec 14 it would sell stock to repay US$20 billion in bailout funds to the US government. Abu Dhabi is also said to be trying to avoid further investment losses after this week agreeing to provide US$10 billion to help Dubai World avoid a bond default.

The news that Singapore’s jobless rate continued to slow confirmed recovery expectations but did not have much impact compared to regional concerns. What is interesting to note is that Singapore’s manufacturing continued to shrink, losing 6,400 jobs in the three months ended September, the fourth straight quarter of decline. It was offset by 12,700 new jobs in the services sector where the hospitality and Integrated Resorts are adding on more people.

Chartwatch: High-end developers still on a roll
The Straits Times Index closed up 0.5% to 2,813.93, led by Singapore Airlines, which said it would suspend some destinations but added more flights on others as it adjusted its services to suit different growing markets, and Singapore Telecommunications.

Singapore property developers sold 600 units in November, down 26% from 811 units in October. “While the mass market suffered from a lack of new launches, the upper-mid and high end volume started to pick up with Ho Bee Group’s Parvis being the top-selling project. Our property analyst expects 8,000–10,000 units sales next year (compared to 14,400 YTD) with the high-end enjoying a percentage improvement,” notes DBS Vickers. Their top buys areSC Global Developments (Buy, TP: $1.92), Ho Bee (Buy, TP: $1.99) and Wing Tai Holdings (Buy, $2.05 maintained). UOB KayHian also says similar, that the “high-end segment maintains strong sales momentum despite overall slowdown.” They have buys on Ho Bee, Wheelock Properties and Wing Tai.

For the rest of the week, the outcome of the US Fed’s FOMC (Federal Open Market Committee) meeting will be the decider. Most economists expect the Fed will leave rates unchanged as job and credit growth remains weak. “The FED is expected to raise rates only in 2H10. The USD strengthened with the USD Index up 0.78% to 76.96,” says DBS Vickers. “Oil price should trade from USD70–90pbl, averaging at USD80pbl in 2010.”
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