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’.

Read also: Top 5 recovering Singapore share prices amid coronavirus pandemic

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

IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

The information/research herein is prepared by IG Asia Pte Ltd (IGA) and its foreign affiliated companies (collectively known as the IG Group) and is intended for general circulation only. It does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit.

Please see important Research Disclaimer.

React to global volatility

Market volatility continues as coronavirus concerns amplify. Trade with IG and 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 only incur a fee when triggered
  • Round-the-clock assistance – our highly skilled team are available when you need support

Live prices on most popular markets

  • Forex
  • Shares
  • Indices
liveprices.javascriptrequired
liveprices.javascriptrequired

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.

liveprices.javascriptrequired

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 20 mins.

The Momentum Report

Get the week’s momentum report sent directly to your inbox every Monday for FREE. The Week Ahead gives you a full calendar of upcoming key events to monitor in the coming week, as well as commentary and insight from our expert analysts on the major indices to watch.

For more info on how we might use your data, see our privacy notice and access policy and privacy webpage.

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.