SingTel share price riding the storm

What a ride! In my previous article, I wrote that SingTel share price is in for a frightening roller-coaster ride after ex-dividend day. Indeed, SingTel share price plunged from $3.30 on 23 July to $3.06 on 13 August. It could have been worse if its not for the strong institutional support in July. SingTel topped the list of institutional net buy in July, with net buy of $49.4 million.

Riding the storm

SingTel share price has since recovered to the $3.10 level, probably because the intensity of the short-selling attacks had reduced and the strong support from institutional players. The less-than-glowing first quarter financial results for FY2019 could have triggered the recent correction in SingTel share price. Operating revenue dropped to $4.13 billion as compared to $4.16 billion in last year. Profit after tax sank to $826 million from $886 million recorded in last year.

Although the latest financial results had been less than stellar, there were bright spots as SingTel’s Optus powered ahead to capture market share in mobile market and recorded higher EBITDA. Regional associates like AIS, Intouch and Globe also recorded double digits growth for net profit. The upcoming IPO of its subsidiary, Airtel Africa, could be a positive catalyst to SingTel share price as well.

Singtel share price

The current bearish sentiments of SingTel share price should be due to the heightened competition in overseas markets, and not Singapore market. In this regard, the key battle to be fought is in overseas, and not in Singapore. Decline in net profits from major regional associates, Telkomsel and Airtel, continued to roil SingTel share price.

The volatility in SingTel share price means that investors must have a strategy of setting entry and exit levels. Although the long-term fundamentals of SingTel remain intact, the business headwinds could demolish prospects of significant capital appreciation for this counter. In this article, let’s examine the dark forces and positive catalysts that could set SingTel share price on fire or send the stock into a devastating tailspin.

SingTel share price to rock and roll

At current trading level, SingTel share price is being traded at 6-year low. For those who bought at $3.80 in December 2017, they would be staring at massive paper losses. That was the period when SingTel share price surged upon the divestment of NetLink Trust, which yielded a cash windfall of $1.1 billion for SingTel and a special dividend of $0.03 was [This is a premium article. The rest of the content is blocked and can be accessible by SG Wealth Builder Members only. To read the full content, please sign up as member.]

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