Is this the beginning of the end for Singtel share price? Following the release of a set of terrible 1Q results, Singtel share price seems set for another roller coaster ride. In my previous article, I wrote that I had feared the worst for Singtel share price, citing this counter as vulnerable target for short-sellers. On the basis of the current Singtel share price, I think my concerns had been valid.
Many investors argued that the best chance for accumulation of blue chips is when the counter sinks into the rock bottom. To this end, I do not disagree but is it really the right time to enter Singtel? You certainly don’t want to catch a falling knife. Also, you don’t want to clash with the big boys when they are shorting Singtel share price.
Data do not lie. In 2019, Singtel share price declined from $3.60 in July to $3.15 in August. In 2018, this counter fell from $3.30 in July to a low of $2.80 by end of the year. On 28 July 2017, SingTel share price collapsed from $4.00 to reach $3.68 in September 2017. Prior to that, SingTel share price fell from a high of $4.30 on 22 July 2016 to a bottom low of $3.65 on 31 December 2016.
The year 2015 was another horror ride for shareholders as the correction was even worse – falling from a giddy high of $4.34 on 24 July 2015 to reach a mind-boggling low of $3.56 in October 2015.
Based on the above trend and the current business fundamentals of Singtel, it is difficult to be bullish with the short-term outlook for Singtel share price. Indeed, FY2020 has been incredibly challenging for Singtel because of the fallout from the devastating COVID-19 pandemic.
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 ambushed by short-sellers
The reason for the volatility of Singtel share price in recent years could be attributed to its considerably large pool of lending shares, which stood at 27,253,659 as at 19 August 2020. Apparently, a large number of investors had loaned to SGX their shares to earn the lending fee. However, in doing so, the large lending pool of Singtel shares made Singtel share price vulnerable to short-selling attacks by institutional investors.
To rub salt into injury, the borrowing rate is only 0.25% per annum for Singtel shares! At such dirt cheap rate, the big boys will likely to short Singtel short price. Evidently, the table below revealed that the volume of short selling activities had increased significantly, presumably short sellers had [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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