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BT EXCLUSIVE

Hot stock: Singtel sinks to 12-year low

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Singtel remains the most widely owned stock in Singapore with some 16.32 billion shares outstanding as at Tuesday, according to the Singapore Exchange's website.

SINGAPORE Telecommunications' (Singtel) share price on Tuesday fell to its lowest in 12 years as heavy volumes changed hands.

It lost S$0.04 or 1.8 per cent to S$2.17 as at 3.42pm, after 33.7 million shares were traded. The price also touched an intra-day low of S$2.16 after 3pm. The last time it closed below this level was in October 2008.

The counter was the second most active by value and the fourth most traded stock by volume on the Singapore bourse in the afternoon.

There were more than 60 large trades - with a value of more than S$150,000 each - during the day as at 3.36pm, according to Shareinvestor data. One married deal was also recorded on Shareinvestor at around 9.04am, done at S$2.205 with 59,300 shares changing hands.

But even as its share price has skidded since the start of this year, Singtel remains the most widely owned stock in Singapore with some 16.32 billion shares outstanding as at Tuesday, according to the Singapore Exchange's website. Singtel's website also states that there are more than one million Singaporeans among its retail shareholders.

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An investor who has been holding the blue chip since its initial public offering (IPO) in 1993 would have got a total return of 56.8 per cent, assuming the dividends were reinvested into the securities, according to Bloomberg data.

The IPO represented 11 per cent of Singtel shares, with the rest held by Temasek Holdings. The public offer was done via three tranches of Group A, B and C shares, with Singapore citizens able to buy Group A shares at a discount.

Besides, Singtel's latest valuation as measured by yield is nowhere near its record low. In the current quarter, it has traded at an average dividend yield of 5.6 per cent. That's below the peak of 6.9 per cent for the quarter ended March 31, 2020, but above the trough of 2.6 per cent for the quarter ended Sept 30, 2000.

Analysts in recent weeks have continued to favour the stock, with mostly "buy" recommendations.

CGS-CIMB kept its "add" call and S$3.10 target price (TP) on Sept 11, DBS maintained a "buy" rating while cutting its TP to S$2.69 on Sept 4, while RHB stayed "buy" with a S$3.20 TP on Aug 18. OCBC also has a "buy" call on Singtel as at Aug 18, with a lowered fair value of S$3.08.

And the stock has outperformed over the last decade, notwithstanding Singtel's worrying financial metrics.

From end-2009 to end-2019, before the Covid-19 crisis started, shares in Singtel delivered a total return of 81.3 per cent. The Straits Times Index returned 25.4 per cent on the same basis.

That being said, a significant portion of that return came from Singtel's generous dividends, which are now being threatened by Covid-19 and the company's deteriorating financial position.

READ MORE: Singtel's sagging stock isn't an opportunity for investors but a sign of increasing risks

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