SINGAPORE (March 16): UOB Kay Hian says Singapore Airlines shares will “at least” perform as well as the Singapore market after trailing the local benchmark in the first three months of the year.

SIA shares have gained 3.8% since the beginning of the year, while the Straits Times Index is up 9.3%.

“Most of the known negatives are already priced in but potential positives have yet to be," UOB says.

UOB also notes SIA trades at low valuations and the carrier may add passengers from China if the country escalates its dispute with South Korea.

Cargo business is also looking up and SIA will benefit, UOB adds, predicting its shares will rise closer to its target of S$10.40.

Shares of SIA are up 2 Singapore cents at S$9.95.