Is Singtel worth trading now?

Although the telco’s stocks are down this week, Maybank analysts wrote on Monday (18 January) that they see further share price upsides in the coming months.

  • Singapore Telecommunications’ (SGX: Z74) share price fell 1.6% at the start of the week
  • The telco was not the only stock that saw losses, with the Straits Times Index also in the red
  • The global stock market started the week on a bearish note as the number of Covid-19 cases soared
  • Nevertheless, analysts from Maybank are favouring a 17.6% on the stock, citing its ‘deep value’
  • Want to open a position on Singtel? Sign up for an IG account today.

Singtel share price: the latest

Singtel shares are down this week, mirroring the stock market’s sluggishness amidst a rising number of Covid-19 cases globally.

The counter closed at S$2.45 a share on Tuesday (19 January 2021), down some 2.8% since last Thursday’s closing price of S$2.52.

Comparatively, the Straits Times Index had declined as much as 1% on Monday (18 January). It has recovered since, but is still slightly below last Friday’s average price level.

Arbitration ruling in favour of AIS

Last week, Singtel’s share price rallied over 1.5% after its Thai associate, Advanced Info Service Public Company (AIS), received the Arbitration Committee resolution, which dismissed state-owned operator CAT Telecom Public Company’s dispute.

The resolution states that AIS’s subsidiary Digital Phone Co (DPC) is not obliged to transfer telecom equipment or make payment as per each claim of CAT.

CAT is eligible to file a petition to the Central Administrative Court to revoke the resolution within 90 days.

CAT’s original claim, submitted in January 2018, was for a total of 13.43 billion baht (S$592 million) and an additional claim for an opportunity loss of 116 million baht (S$5.1 million) plus default interest rate at 7.5% per annum.

Where next for the Singtel stock?

In terms of share price outlook, the Singtel stock has an average rating of ‘outperform’ and 12-month target price of S$2.931, according to SGX StockFacts.

The average target price represents an upside of 21.9% from the last traded price.

The latest rating came from Maybank’s Kareen Chan on 18 January. She gave the stock a target price of S$2.88 a share while reiterating a ‘buy’ rating.

Chan wrote that although the stock has rebounded 25% from record lows, she sees further upside with recovery now underway, ‘driven by upswing from Bharti Airtel (Singtel’s Indian associate) in FY22E’.

‘We see deep value in the stock and it is backed by 5.1% yield optimism,’ she added.

Meanwhile, UOB’s equity research team also named Singtel as one of its ‘stock alpha picks’ for January 2021.

The analysts also gave a ‘buy’ recommendation and a price target of S$2.84 a share. Share price catalysts include the rolling out of the Grab-Singtel consortium’s digital banking licence plans in 1H21, the reopening of economies in early 2021, and a faster-than-expected recovery in Optus’ consumer and enterprise business.

How to trade Singtel with IG

Are you feeling bullish or bearish on Singtel’s stocks?

Either way you can buy (long) or sell (short) the asset using derivatives like CFDs offered on IG's industry-leading trading platform in a few easy steps:

  1. Create a live or demo IG Trading Account, or log in to your existing account
  2. Enter <Singapore Telecommunications (Singtel)> in the search bar and select the instrument
  3. Choose your position size
  4. Click on ‘buy’ or ‘sell’ in the deal ticket
  5. Confirm the trade

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