Singtel share price in mood swings

Lifetime Membership For Singtel share price, it never rains but pours. The shares of Singapore’s largest telco went through some bouts of volatility lately. On 13th March, short selling volume on Singtel rocketed to a staggering 20 million and then nearly 30 million on 14th March. Apparently, short-sellers went in for the kill following the adverse news of Singtel losing its Australia court case on the financing of the acquisition of Optus.

Nonetheless, Man proposes, God disposes. Fake news on the supposedly divestment of Optus by Singtel might have caused short-sellers to suffer a horrendous short squeeze as Singtel share price surged 3.33% within the past 5 days. The turn of events might have walloped short sellers who were looking to profit from Singtel’s woes as Singtel came out to rubbish the divestment of Optus on 13 March.

Bizarrely, the month of March 2024 turned out to be a particularly busy month for Singtel as a series of event unfolded to affect the form of Singtel share price (and we have not even reached the end of the month yet). On 6 March 2024, Optus was fined A$1.3 million for failing to upload the information of close to 200,000 customers between January 2021 and September 2023 to Integrated Public Number Database (IPND), a database is used by emergency services to provide location information and emergency alerts to the police, ambulance and fire brigade.

Strangely, Singtel did not file this news in SGX filing. Perhaps the issue and the resulting fine were considered too trivial for Singtel to make known to shareholders. The failure to upload information to IPND could be linked to the fallout from last year’s cybersecurity attack on Optus. Indeed, the Optus cybersecurity attack is a ticking timebomb for Singtel as the telco faces a potential damaging Australian class suit.

On 28 August 2023, SGX revealed that has been notified by the Office of the Australian Information Commissioner (“OAIC”) that “Singtel Optus has been notified by the Office of the Australian Information Commissioner (“OAIC”) that the Commissioner has decided to accept a representative complaint made by the law firm, Johnson Winter Slattery, on behalf of an individual, and to commence an investigation into that complaint”.

Several analysts had predicted that the Optus cybersecurity attack could cost Singtel about US$500 million, to which Singtel had rubbished as “speculative”. However, I do not think that the Australian government would let Singtel off the hook so easily. After all, the incident had caused a spate of scams in Australia, leading to the government to set up a new cybersecurity body and revamp its rules in which the Minister for Home Affairs and Cyber Security has blasted as “bloody useless”. Looking at the uproar among the victims and the tone from the government officials, I would be amazed that the total costs would amount to just $142 million (this was the provision made by Singtel before the notification of the lawsuit).

And then, on 8 March 2024, the Federal Court of Australia dismissed its appeal of Singapore Telecom Australia Investments Pty Limited (“STAI”), its wholly-owned Australian subsidiary, in respect of STAI’s action against the Commissioner of Taxation.

The court case relates to the acquisition financing of Singtel Optus Pty Limited in 2001. In 2016 and 2017, STAI received amended assessments from the Australian Taxation Office (“ATO”), comprising primary tax of A$268 million, interest of A$58 million and penalties of A$67 million. STAI’s holding company, Singtel Australia Investment Ltd., would be entitled to a corresponding refund of withholding tax estimated at A$89 million in relation to the amended assessments. In accordance with ATO administrative practice, STAI had paid a minimum amount of 50% of the assessed primary tax in November 2016. Singtel has also made provision for the tax to be paid to the Australian government in its financial statements.

In April 2023, I wrote in this blog that the reason as to why Singtel share price had not collapsed might be attributed to the fact that most investors should be holding out for the special dividend and final dividend. Indeed, following the ex-dividends, Singtel share price had plunged from $2.66 on 31 July 2023 to a low of $2.32 on 22 August 2023. Question now is how would Singtel share price unravel in 2024?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 Australia misadventure

The troubles in Australia were [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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