After leading SingTel to achieve an impressive record net profit of $5.45 billion for FY2018, CEO Chua Sock Koong must be stumped for words when SingTel share price plunged to a six year low on 18 June 2018. At $3.17 a piece, SingTel share price is technically entering into a bear mode territory. In the context of the current SingTel share price, is this counter a value buy or could it be a falling knife?
Many investors had pointed that the entry of fourth telco player could have played a part in the sharp decline of SingTel share price in recent months. But then again, the earnings from Singapore mobile market is significantly much lesser than that from its Australia Optus and Indonesia Telkomsel. In this regard, the current headwind should be due to its poor performance from its regional associates rather than the heightened competition in Singapore market.
Falling SingTel share price
At current dividend yield of 5.5%, SingTel share price is indeed alluring if you compared it to the coupon rates of the recent Astrea IV bonds and Singapore Savings Bonds. Barring unforeseen circumstances, the Group expects to maintain its ordinary dividends of 17.5 cents per share for the next two financial years. With such generous dividend payout, SingTel is indeed giving bond issuers a run for their money.
Being 52.24% owned by Temasek Holdings and 5.25% by Central Provident Fund Board, SingTel is considered to be too “big to fail” for the Singapore government. Henceforth, in my opinion, it is too exaggerated to deem the current SingTel share price as falling knife as it will not be in government’s interest to see the share price collapses.
At best, the falling SingTel share price should be viewed [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.]
Sign up as member and receive a bonus investment report on Singapore stocks! The membership benefits include:
1) Access to the latest premium articles of SG Wealth Builder
2) Email notifications of latest blog articles
3) Access to Wealth Forum for investment ideas and discussion
4) Free bonus investment report
5) Request for coverage on stocks, insurance and other personal financial topics
6) Comment in articles and Wealth Forum
Note: After payment is made, you will be prompted with registration form to create your user-id and personal password.
You may sign up for the monthly subscription for only $19.99 per month. You can choose to cancel the subscription after one month with no penalty.
Subscribe to Blog via Email
SG Wealth Builder