Singtel share price in state of emergency

What a disaster for Singtel share price. Investors must have thought they have seen the worst of Singtel share price when global stock markets plunged on 23 March 2020 due to the COVID-19 pandemic. Most stocks had since recovered from that dark chapter but Singtel share price continued its dismal run. What the hell has happened to this leading light of SGX?

Singtel share price

Amid the devastating meltdown of Singtel share price, the telco announced the retirement of CEO Chua Song Koong effective on 1 January 2021. That fateful announcement provided some temporary relief for Singtel share price, which surged from $2.15 on 1 October to $2.20 on 14 October. But sentiments continued to be sour for this counter as Singtel share price continued its bearish run thereafter. Is this really the end of the road for Singtel share price?

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As I have never invested in Singtel, I have nothing against CEO Chua Song Koong. Arguably, her best achievements were the acquisition of Optus in Australia and the divestment of Netlink Trust in 2017, which led to Singtel share price hitting a high of $4.00. But her failure to turnaround the perennial loss-making Group Digital Life and Airtel in India could have led to her imminent departure.

On 16 October, the Group announced that its joint venture, Telkomsel, had entered into a sale and purchase agreement for the sale of 6,050 telecommunication towers to PT Dayamitra Telekomunikasi (“Mitratel”) for IDR10.3 trillion (approximately $950 million). This is supposedly a positive news. Nevertheless, this also did not provide any uplift for Singtel share price, which continued to spiral out of control.

This is definitely one of the darkest chapters for Singtel share price. Should investors run for their lives or keep faith with the regional telco giant? Some analysts have talked up the prospect of Singtel winning a digital bank license as potential catalyst for Singtel share price. But I view this development more of a red herring for Singtel share price. In this article, I will share my outlook for Singtel share price in the coming months.

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 Great Depression

The venomous form of Singtel share price is certainly bizarre because 1st quarter update revealed that the telco was still making decent profits, albeit at much lower level due to COVID-19. Perhaps investors were fed up by the relentless exceptional charges from India Airtel. Or perhaps, investors simply has no confidence in Singtel’s ability to manage a digital bank.

Most Singtel investors would recall that Amobee was acquired for a staggering USD321 million in April 2012. Then in 2013, HungryGoWhere and Pixable were acquired for $12 million and USD27 million respectively. These digital acquisitions formed part of the Group Digital Life, which had been racking up millions of losses every year since 2013. Over the years, the accumulated losses amounted to a staggering $940 million.

2013$104 million loss
2014$169.8 million loss
2015$216 million loss
2016$136.7 million loss
2017$122.2 million loss
2018$51.3 million loss
2019$91.7 million loss
2020$48.2 million loss

Given the track record of Singtel’s fora in the digital segment, I have doubts that winning the digital bank license will [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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Updated: October 27, 2020 — 11:04 am

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