What an ambush out of nowhere! It seems that I had grossly underestimated the impact of Optus cybersecurity attack on Singtel share price (SGX: Z74).
Six months had passed since the Australian unit of Singtel suffered the fateful cybersecurity attack but Singtel share price (SGX: Z74) continued to be in sluggish form. In fact, at current trading levels, Singtel share price has reverted to the previous low in the aftermath of the cybersecurity attack. When can the counter shake off the blues?
In my last article, I wrote that Singtel share price (SGX: Z74) might have turned the corner due to several strong financial performances in the past few quarters. However, in the stock market, sentiments often prevail. In this regard, clouds of uncertainty may engulf Singtel share price (SGX: Z74) in the coming months until the cybersecurity issue is fully addressed.
To recap, in 22 September 2022, Singtel revealed that its Optus customers’ data were leaked following a cybersecurity attack. Then in October 2022, the telco announced that about 1.2 million of the Australian customers were affected. Apparently, some of the customers’ passport numbers were exposed by the perpetrators. The incident led to fear that a massive class suit action could be coming Singtel’s way.
To make matters worse, a few weeks after Optus’ data breach, another unit of Singtel, Dialog faced cyberattack that compromised personal data of its employees and clients. The double whammy sent Singtel share price (SGX: Z74) straight to the bin as the counter tumbled to a low of $2.38 on 22 October 2022. Nevertheless, the slump did not last long as Singtel share price (SGX: Z74) stormed back in style with the announcement of a special dividend per share of 5.0 cents in two tranches of 2.5 cents. The special dividend was approved to share the benefits of the Group’s asset recycling initiatives with shareholders.
Fund houses initially bought into Singtel shares as the stock featured in the October (+$35 million) and November (+$67 million) top ten institutional net buy lists in 2022. However, things started to unravel as fund houses started to sell-off Singtel shares since December 2022. The biggest sell-offs by fund houses took place in January 2023 (- $180 million).
The sell-offs began in November after transcript revealed that Singtel made a provision of $142 million. The telco cautioned that they had not received any notifications of class suit actions yet and therefore, the $142 million did not factor that in. Given the severity of the cybersecurity attack, the uncertainty for Singtel share price could linger on for at least a year.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 lost support
After enduring a challenging 2022, it seems that Singtel share price could face another brutal year as the counter breached the perennial $2.60 support level. Looking back, the robust form of Singtel share price in early 2022 was largely due to the Group CEO Yuen Kuan Moon’s execution of his three growth pivots for Singtel – harnessing 5G potential use cases, repositioning NCS for overseas ICT expansion and unlocking value from infrastructure assets.
In my view, the only catalyst for Singtel share price in 2023 should be the [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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