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SingTel share price on course for explosive meltdown?

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For the past two weeks, SingTel investors must be feeling wretched as SingTel share price free fall from $3.26 on 30 August to $3.10 on 11 September. The shares had not reverted to the dismal 6-year low witnessed on 3 July 2018 yet. But given the bearish trend, I will not be surprised if SingTel share price experienced yet another explosive meltdown and crashed to below the $3.00 mark in no time.

Although SingTel is the second largest cap in Singapore stock market, investing in this leading light of STI is not easy because this counter is susceptible to short-selling attacks. Unlike local banks, it is also not Temasek Holdings’ style to defend SingTel share price through aggressive shares buyback. Instead, it appears to me that the management of SingTel prefers to let the financial results of the company do the talking. Due to these factors, SingTel share price is expected to experience much volatility in the coming months and investors must have the stomach to withstand the roller coaster ride.

SingTel share price

Seeking the truth from facts

In my previous article (24 July), I wrote that “SingTel share price destined to collapse after ex-dividend day”. In that article, I shared that it is not a matter of whether SingTel share price would drop but by how much it would plunge after ex-dividend day. Based on past years’ data, SingTel share price never fail to correct in the second half of the year, the traditional period after the issuance of SingTel final dividends.

On 28 July 2017, SingTel share price collapsed from $4.00 to reach $3.68 in September 2017. Prior to that, SingTel share price fell from a high of $4.30 on 22 July 2016 to a bottom low of $3.65 on 31 December 2016. The year 2015 was another horror ride for shareholders as the correction was even worse – falling from a giddy high of $4.34 on 24 July 2015 to reach a mind-boggling low of $3.56 in October 2015.

Make no mistake, there are very few companies in South East Asia that boost 650 million mobile customers like SingTel. On this basis alone, SingTel is considered a force to be reckoned with in the region. The truth is that Singtel is a good company to invest for the long-term but it does not mean that investors should buy the stock indiscriminately without strategy. You need to be careful with your monies and determine the right entry level for this blue chip. In short, to make money from shares, you must establish the value before paying the price.

Indeed, many analysts had set an average target price of $3.80 for Singtel stock earlier this year. That may be the fair value for SingTel share price. However, the key to successful investing is to make money at the point of buying, and not at the point of selling. So if you had bought SingTel shares at $3.30 or higher and anticipate to sell at $3.80, this may [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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Updated: September 11, 2018 — 2:31 pm

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