Singtel’s share price recovers 27% as dividend outlook improves
A rumoured sale of property assets by Singtel’s Australian subsidiary Optus has led to analysts raising their dividend predictions for the company.
Singapore Telecommunications (Singtel) shares are currently trading along a six-week apex, with share price at least 27% above the low of 23 March 2020.
Last Tuesday (14 April), the telco group saw its stocks hit S$2.85 per share – its highest level since 11 March.
At the time of writing – at 16:30 SGT on Monday 20 April 2020, Singtel shares are trading at S$2.78 apiece.
IG is a world-leading online trading and investments provider for thousands of financial markets. With CFDs, you can buy long or sell short on Singtel shares depending on whether you think prices will rise or fall. Start today by opening an account on IG's market-leading trading platform.
Sale of Australian mobile towers by Optus
Since our last update on Singtel, the company has made several new announcements, including a planned sale of over A$2 billion (S$1.8 billion) in property assets in Australia.
On 03 April, the Australian Financial Review reported that the group’s Australian subsidiary Optus is in the process of auctioning off its portfolio of mobile phone towers, for which it will lease back from the purchaser to continue operations. According to the news site, the telco has also mandated Bank of America to underwrite the potential sale and leaseback agreement.
Singtel issued the following response shortly after: ‘Singtel regularly reviews its options to optimise its assets and operating model. Singtel wishes to emphasise that there is no certainty or assurance that any transaction will occur.’
It added that it will ‘make further announcements as appropriate…if and when there are any material developments’.
Singtel’s shareholder dividends could revert to 2019 levels
Analysts view the sale of the mobile phone towers as a positive move for the telecommunications provider.
Citibank analysts had written in a research note that the rumoured sale will shore up Singtel’s balance sheet, which could potentially provide a boost to shareholder dividends.
‘If the assets are indeed sold, we see room for dividend upside,’ the analysts wrote, adding that the positive cash flow could allow the group to meet its 2019 dividend per share payout in the current 2021 financial year.
For FY2019, shareholders received a dividend payment of S$0.175 per share for the year ended 31 March 2019. Dividends for FY2020 were lower at S$0.068 a share.
Are you bullish or bearish on Singtel stocks? Either way, you can buy long or sell short on Singapore Telecommunications (Singtel) shares and other Singapore stocks using CFDs and other instruments offered on IG's world-leading trading platform. Start today by opening an IG account.
Liquidators appointed for Singtel’s winding up of HOOQ Digital
Separately, Singtel had also on 13 April appointed liquidators for the ongoing creditors’ voluntary liquidation of video streaming service HOOQ Digital, a joint venture company in which Singtel has an indirect 76.5% effective interest.
The closing of HOOQ ‘is not expected to have any material impact on the net tangible assets or earnings per share of Singtel’, the group had stated in the original Singapore Exchange filing. However, DBS researchers estimated that the liquidation will boost Singtel’s bottom line by S$60 million to S$65 million a year for the 2021 and 2022 financial years.
At the conclusion of its 2019 financial year ended 31 March 2019, HOOQ had accumulated US$70.8 million in liabilities, according to the Accounting and Corporate Regulatory Authority. While revenue increased over 100% last year, pre-tax losses grew from US$56.6 million in 2018 to US$62.5 million in 2019.
How to trade Singapore stocks with IG
Looking to trade Singtel shares and other Singapore Blue Chip Index stocks? Open a live or demo account with IG and buy (long) or sell (short) the asset using derivatives like CFDs in a few easy steps:
- Create an IG Trading Account or log in to your existing account
- Enter <company name> or <ticket code> in the search bar and select it
- Choose your position size
- Click on ‘buy’ or ‘sell’ in the deal ticket
- Confirm the trade
The information on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG Bank S.A. accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer.
React to global volatility
Market volatility continues as coronavirus dominates the global agenda. Trade with us to take advantage of:
- Tight spreads – from just 1 point on major indices, and 2.8 on US crude
- Guaranteed stops – they’re free to use, and you’ll only pay a small fee if they’re triggered
- Round-the-clock assistance – our highly skilled teams are available when you need support
Live prices on most popular markets
You might be interested in…
Find out what charges your trades could incur with our transparent fee structure.
Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.
Stay on top of upcoming market-moving events with our customisable economic calendar.