Why are Singtel shares a 'buy' now?

Analysts believe that the telco’s stock price, up 10% in 2021, has more room to grow in the next 12 months.

  • Singtel (SGX: Z74) share price retreats over 1% on Monday (25 October)
  • The company’s subsidiary Trustwave has sold off its payment card compliance, SecureTrust, for US$80 million
  • 17 out of 19 analysts currently rate the telco stock a ‘buy’
  • Keen to trade Singtel shares? Open an account with us to short or long the stock now.

Singtel’s Trustwave sells off SecureTrust

Singtel’s cyber security arm Trustwave has divested SecureTrust, its payment card compliance business, to Sysnet Global Solutions, a provider of cyber security and compliance solutions, for a cash consideration of US$80 million.

The sale comes as part of Singtel’s strategic review of its digital businesses announced in May 2021 to optimise the telco’s resource allocation and reposition these assets for growth.

Singtel Group CEO Mr Yuen Kuan Moon said that the divestment is the ‘first step’ following an extensive review of the Trustwave business.

‘With enterprises pivoting fast to hybrid, multi-cloud environments, the cyber threat landscape has changed considerably and the need for a focused set of services centered on managed threat detection and response has grown,’ said Mr Yuen.

‘Trustwave can now better meet those needs by concentrating on its core offerings of managed detection and response, managed security services, and consulting services to help businesses reduce complexity and cyber risk in their environments,’ he added.

In addition to the divestment, certain Trustwave assets that are complementary to the Group’s core telecommunications and system integration business in Asia Pacific will move into Singtel, NCS and Optus.

The integration of these assets will ensure closer alignment with the respective unit’s core products and services. This will enable each local business to focus on core competencies and technology and process innovation, and stay closer to their respective customers.

With this realignment, Singtel’s cyber security business in Asia Pacific will be one of the largest with a revenue of more than S$350 million.

Read more: Beginner's guide to trading

Singtel stock price analysis: the latest

Shares of Singapore’s biggest telecommunications provider were 1.2% lower at S$2.54 as at 15:55 SGT on Monday.

Out of 19 analysts, 17 recently recommended ‘buy’ on Singtel shares, two suggested ‘hold’, and none gave ‘sell’ calls, Bloomberg data showed. Their average target price was S$2.97, implying potential upside of 16.5% based on the stock’s latest price.

CIMB’s research team, which rated Singtel an ‘add’ with a S$2.90 target price, recently highlighted that digital banking may be a value creator for Singtel in the long run, even though it may not be highly profitable in the first five years.

Meanwhile, UOB analysts added Singtel to its ‘Alpha Picks’ list, stating that they like the group’s Australia tower asset monetisation plans. They maintained a ‘buy’ call on the stock alongside a target price of S$2.75.

Thinking of trading Singtel shares?

Go long or short with CFDs on Singtel and 16,000+ shares with our award-winning platform.* Perfect your technique with S$200,000 worth of virtual funds if you sign up for a free demo account today.

*Based on the Investment Trends 2018 Singapore CFD & FX Report based on a survey of over 4,500 traders and investors. Awarded the Best Online Trading Platform by Influential Brands in 2020. Awarded the best retail FX provider for Asia by FX Markets in 2020

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.

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.