What a ride! Singtel share price had been on a fiery form since the start of the year. From a low of $2.86 in January 2019, Singtel share price rose from the dead to hit the current $3.50. Given the current bullish form of Singtel share price, investors must be tempted to enter this counter. But before getting carried away, investors must be wary of walking into a trap.
Make no mistake, there are very few companies in South East Asia that boost 690 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 Singtel share price.
Lately, management had gone on a charm offensive by announcing massive pay cut for the CEO and dangling the possibilities of unlocking the value from its loss-making ventures – cybersecurity and digital life businesses. The market went into overdrive, thinking that another windfall like the NetLink NBN Trust in 2018 is on the card. Nonetheless, my view is that Singtel share price is entering a dark chapter and could be poised for another correction. This time round, the correction should even be more severe than last year’s.
Singtel share price ready to collapse again?
The month of May was the turning point for Singtel share price as big boys bought Singtel shares. This counter hit the top of the institution net buy list, with fund houses net buying $127 million worth of Singtel shares. Retail investors should be wary of the movement of the big boys to avoid being caught with their pants down. Given the massive run up in Singtel share price, entering at this moment may be risky because what goes up must surely come down.
For context, 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.
In 2018, Singtel share price fell from $3.30 in July to a low of $2.80 by end of the year. 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.
Current Singtel share price is not built on business fundamentals as full year FY2019 results saw [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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