LIFETIME MEMBERSHIP 2 November 2020 will be remembered by many investors as the darkest day for Singtel share price. That was the fateful day that Singtel share price crashed to decades low of $2.00. The dismal form of Singtel share price is perhaps a vote of no confidence in the company’s outlook. Nonetheless, Singtel share price fought back from the low to reach a high of $2.40. The turn of Singtel share price came after the digital bank license win in December 2020.
On looking back, Singtel share price peaked at a high of $4.40 in April 2015. Incidentally, SingPost share price also peaked at a high of $2.00 in that period. Subsequently, the implosion of the corporate governance over at SingPost had caused the share price of the mailing company to suffer a horrendous meltdown. Being a substantial shareholder of SingPost, Singtel had to dispatch its former Chairman, Simon Israel, to double hat as Chairman of SingPost. Consequently, Singtel share price never recapture the high of $4.40.
Obviously, it is irresponsible to attribute the downfall of Singtel share price to events unfolding at SingPost given that they are two separate entities operating in different sectors. What I am trying to highlight is that the challenges faced by Singtel and SingPost could have taken a toll on former Chairman, Simon Israel. Managing two key assets of Temasek Holdings is no walk in the park. This is especially so given that Singtel faced its own set of challenges.
Indeed, the period from 2015 to 2016 proved to be challenging for Singtel as the telecommunication industry underwent liberalisation that saw TPG being granted a full telecommunication license. The entry of Mobile Virtual Network Operators (MVNO) also heightened competition among the telco players. Arising from these external factors, Singtel share price came under pressure. To unlock value in Singtel share price, former Singtel CEO Chua Sock Koong, divested majority stake in NetLink Trust and listed the asset as NetLink NBN Trust in 2017.
The listing of NetLink NBN Trust did restore some levels of sanity to Singtel share price as the counter stabilised at the $3.50 to $3.80 levels throughout 2017. Unfortunately, the peace did not last long. In 2018, Singtel share price dived once again after the company reported poor financial results due to significantly lower contributions from its regional associates – Airtel and Telkomsel. The lower contributions were caused by the raging mobile plans price wars in Indonesia and India.
The straw that broke the camel’s back probably came in 2019 when the Indian Supreme Court fined Singtel associate Airtel a whopping $4 billion. To contain the fallout, Singtel had to set aside a staggering provision of $1.93 billion(pre-tax) for the mind-boggling penalty. Because of this, Singtel share price struggled throughout 2019. Shortly after the Airtel saga, COVID-19 pandemic imploded out of nowhere in 2020 and the rest is history. Against this context, what will be the outlook for Singtel share price in 2021?
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 in new dawn
In 2021, Singtel share price started a new [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.]LIFETIME MEMBERSHIP
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