In my whole life, I have never seen such chaos in the financial market. No, not even during the Great Financial Crisis of 2008. In 2020, Dow Jones had collapsed from a high of almost 30,000 points to a low of 20,000 points within the span of only a month. Sure, Dow Jones had also collapsed by 7000 points but that was over a period of 16 months (from October 2007 to February 2009). Given the speed and magnitude of the correction, the current crisis of confidence is unprecedented. Against this background, even Singtel share price suffered nuclear meltdown.
Year-to-date, Singtel share price had tanked 25%. In fact, Singtel share price has reached my previous target entry price of $2.60. However, my view is that the market has not reached a bottom yet. With the unraveling virus outbreak, there is too much market fear at the moment. In this regard, there is high possibility that Singtel share price may even breach the $2.00 support level and reach a low of $1.50.
Of course, it will be a real nightmare if Singtel share price really plunge to $1.50 because that will wipe off billion dollar worth of valuation from Singtel share price. Temasek Holdings has a stake of 50% while CPF Board holds 5% in this counter. Thus, I doubt the government will let this happen. Then again, when there is a market crash of this scale, Singtel share price is not alone in suffering. Most of the STI constituents are affected as well.
Question now is: how low will Singtel share price go? The latest headwind came on the back of a bitter telco war for its associates in India and Indonesia. The challenges faced by its regional associates punctuated the form of Singtel share price in recent years because the telco derives most of its earnings from its network of overseas associates. Previously, the trade war saga between US and China led to weak macroeconomic condition, causing Singtel share price to be bearish. The current upheaval in the financial market only add further uncertainties to Singtel share price.
Note that this is an opinion article and not meant to be a financial advice. Please do your due diligence or engage financial advisors before investing in the stock market. Furthermore, I am not vested and have never invested in Singtel before. Whether Singtel share price will surge or collapse has no impact on me. Thus, this article is not meant to induce readers to make any form of investment decisions.
Singtel share price battered by virus
Will it be a long winter for Singtel share price? In my opinion, the impact of the current crisis should be short-term as the company had built a very strong investment moat over the decades. The Group has presence in Asia, Australia and Africa and reaches over 710 million mobile customers in 21 countries. Furthermore, Singtel has also diversified its business to include enterprise ICT, data center services and cybersecurity.
Through the years, Singtel share price has overcome the financial ravages brought forth by crises such as the Asia Financial crisis (1997), the SARS outbreak (2003) and the Great Financial Crisis (2009). In every episode, this counter had always managed to bounce back impressively to reach the $3 – $4 bandwidth. This time, it will be no difference but will it be a V-shape or a protracted recovery for Singtel share price? To tackle this question, the following three factors are critical in the road ahead for the telco:
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