Singtel share price in turmoil

In 2013, Singtel was trumped by Telenor and Ooredoo in its telco licensing bid in Myanmar, one of the world’s last untapped mobile market. The doomed attempt illustrated the perennial challenge that Singtel faces in its overseas expansion against the backdrop of growing competition in the Southeast Asia region. Nevertheless, not many would agree with the management expansion plan as Singtel share price stuttered following Moody’s revision of Singtel outlook to “negative”.

Although Moody’s lowered Singtel’s outlook, it affirmed Singtel senior unsecured ratings of A1. Moody’s has also affirmed the (P)A1 rating on the Euro Medium Term Notes programme as well as the A1 rating on all notes issued by Singtel Group Treasury. Despite so, Singtel share price wobbled slightly, dropping from $3.00 on 5 March 2019 to the current $2.95.

While Moody’s assessment of Singtel is clearly damning, Singtel shot itself in the foot by delivering a set of Q3FY2019 results that fell short of many analyst estimates. Most business units reported declining profits on year-on-year basis. To make matters worse, the latest results marked the fifth consecutive quarter of declining profits. As a result, the management took a rare step to issue a statement that “Singtel remains financially disciplined and committed to maintaining our investment-grade credit ratings”, presumably to defend Singtel share price.

It certainly seems like a perfect storm for Singtel share price but should investors panic and run for their lives? In this article, I will share my insights on Singtel share price.

Singtel share price ready to roil?

If investors look back, Singtel share price started the year in bad shape as the counter sunk into multi-years low of $2.86. Yet only in April 2015, Singtel share price was trading at $4.40. A combination of factors, such as entry of MVNOs, TPG Telecom and technology disruptions, had led to the volatility of Singtel share price. The divestment of NetLink Trust in 2017 had provided much support for Singtel share price but the “feel good” factor evaporated soon as reality started to sink in for Singtel investors.

Although SingTel is the second largest cap in Singapore stock market, investing in this leading light of STI is not easy because this counter is susceptible to short-selling attacks. Unlike local banks, it is also not Temasek Holdings’ style to defend SingTel share price through aggressive shares buyback. Thus, to make money out of this counter, investors must have a long-term strategy of entering at the right price.

The Moody’s report certainly provided a basis for short-sellers to target Singtel share price yet again. In the week of 4 March, short selling activities on Singtel share price surged to an eye-popping [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.]

Best SGX stock research campaign

In a bid to raise financial literacy and reward SG Wealth Builder members, I am pleased to launch the Best SGX stock research campaign. Winner of this contest gets to receive cash prize of $1000!

The rationale for launching this activity is to level the playing field for retail investors, who often lack access to quality SGX stock research, especially homegrown SME stocks. Through this SGX stock research campaign, I hope to raise interest in SGX stocks among local investors, and at the same time, encourage members to share ideas and showcase their analytic skills. The winning entry will be published in this blog for learning purposes.

The winning SGX stock research article must cover a stock that is listed in Singapore Exchange (SGX) and should be engaging and interesting to read. From a story-telling perspective, you can share your best or worst SGX stock investments and what valuable lessons that can be gleaned. Ideally, the article should also contain data to back up the thesis and provides insightful analysis.

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1. This campaign is open to existing SG Wealth Builder Members only. If you are not a member, please sign up here. Email subscribers are not eligible.
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1. Each article must be at least 1000 words in Microsoft Word document. Must not be published at any platform before. Any article found plagiarism would be automatically disqualified. You do not need to provide infographic or images but if you do, they must carry the applicable licenses.
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3. In your document submission, you must provide your member userid or email address.
4. The winning entry will be announced on 7 June 2019 and the winner will be notified through email. He/she must give the consent for the article to be published in this blog in order to receive the cash prize.
5. In the event of a lack of quality submissions, there may be no winner. However, under such circumstances, consolation prizes may be given for entries that do not meet the evaluation criteria.

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