UOB Kay Hian raised its rating on airline services company SATS Ltd to hold from sell and increased its target price to S$2.43 from S$2.34, citing an attractive dividend yield.

Shares of SATS ticked up 0.4 percent to S$2.54, and have risen about 18 percent so far this year.

UOB expects SATS to pay out a special and final dividend of 17 Singapore cents, in the absence of any plans for major mergers and acquisitions, implying a dividend yield of about 10 percent.

Previous concerns over a slowdown in passenger and cargo traffic have also abated, due to a boost in low-cost carrier traffic, which will lead to incremental earnings and cash flow for SATS, UOB said.

1000 (0200 GMT)

(Reporting by Leonard How in Singapore; leonard.how@thomsonreuters.com)