Toward the end of 2019, I was seriously contemplating to invest in Singtel share using my SRS fund. Eventually, I opted to invest in OCBC instead. Obviously, the Indian Supreme Court’s hefty fine on its associate (Airtel) played a part in my investment decision. To contain the fall out, Singtel had to set aside a staggering provision of $1.93 billion (pre-tax) for the mind-boggling penalty. In the process, Singtel share price shattered like falling glass.
The massive provision resulted in Singtel recording its first ever quarterly loss ($674 million). The latest result also came on the back of an eighth consecutive quarter of declining profits/losses. Against this backdrop, Singtel share price corrected to $3.18 and only climbed back to $3.30 level recently.
Analysts had argued that the Airtel provision is likely to be ‘one-off’. To this, I do not disagree. But in my previous article, I have also highlighted that Singtel share price could be volatile due to its various legal disputes with foreign stakeholders. Apart from Airtel, the financial result also revealed that Singtel’s joint venture in Thailand, AIS, is locked in a legal dispute amounting to an estimated total of $7 billion.
It should also be highlighted …