LIFETIME MEMBERSHIP It seems that winter may be over for Singtel share price (SGX: Z74). The counter has been on a bullish form in recent weeks following the announcement of its A$1.9 billion divestment of Australia Tower Network (ATN), a wholly-owned subsidiary which operates Optus’ passive telecommunications tower infrastructure. To put the icing on the cake, Singtel is also creating a regional data centre to capture digital growth. Has Singtel share price (SGX: Z74) reached a turnaround?
Singtel share price (SGX: Z74) has been on such a trashy form for the past two years that many investors have been left wondering will there be light at end of tunnel for this counter. Nevertheless, the revelation of three new pivots by CEO Yuen Kuan Moon on 27 May 2021 provided much hope for investors. The latest deals affirmed the management’s resolve to execute the CEO’s vision for Singtel growth.
In my previous article, it was highlighted that Singtel’ strategy is to focus on 5G network business, transforming NCS into a B2B powerhouse in Asia and divesting the telco infrastructure assets. Indeed, for the ATN divestment, the management shared that the proceeds will be used to fund “the rollout of 5G and other growth initiatives, including expanding the B2B digital services business in Singapore and Australia through NCS”. In my view, the latest move demonstrated management’s discipline in executing its strategic growth plan and this should bode well for Singtel share price (SGX: Z74) in the coming months.
In the short-term, the catalyst that will really propel Singtel share price (SGX: Z74) should be the divestment or listing of the telco infrastructure assets. Optus’ divestment of its tower assets was expected to close before the end of the year. According to the management, Telkomsel, Airtel and Globe had also completed similar transactions to unlock significant value from their assets.
Another development that could turbocharge Singtel share price (SGX: Z74) is the telco’s data centre business. Currently, Singtel owns ten data centres in Singapore, Australia and Hong Kong. In the latest announcement, the telco revealed its plan to become one of the largest data centre operators in the region. For a start, it has signed an MOU with Thailand’s Gulf Energy and is in talks with Indonesia’s Telkomsel to build data centres in Thailand and Indonesia. It is possible to list the data centres as REIT to unlock more cash. This is what Keppel Corp had done through Keppel DC REIT.
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 (SGX: Z74) 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 (SGX: Z74) shrugs off Bharti Airtel rights ambush
To be frank, I had feared the worst for Singtel share price (SGX: Z74) when the telco announced on 23 September 2021 that it would subscribe Bharti Airtel rights issue of up to US$405 million. What is concerning to most investors is whether Bharti Airtel can turn around soon. In Q2FY2020, Singtel had to set aside a staggering provision of $1.93 billion (pre-tax) for the Indian Supreme Court’s hefty fine on its associate (Airtel). And then in Q4FY2020, Singtel had to take a net exceptional charge of $302 million due to Airtel’s provision for a one-time spectrum charge. Prior to these issues, Singtel paid S$735 million for subscription to Bharti Airtel rights issue.
Perhaps sensing blood for Singtel share price (SGX: Z74), the management quickly[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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