Singtel (SGX: Z74)
Maybank analysts rated Singtel ‘buy’ with a S$2.83 target recently, citing that the telco may ‘potentially split the group into infrastructure and a customer-facing MVNO (mobile virtual network operator) service’.
Singtel has also announced its intention to subscribe to its Indian associate Bharti Airtel’s rights issue at 535 rupees per share for a total consideration of up to 29.4 billion rupees (about US$405 million), across a period of up to three years.
RHB analysts said the subscription may lead to ‘a manageable uptick’ in Singtel’s net debt-to-Ebitda ratio, from 2.1x to 2.2x. RHB maintained its ‘buy’ call on Singtel shares, alongside a S$3 target price.
Likewise, CIMB, reiterating ‘add’ and eyeing S$2.90 per share, highlighted that the payments will have ‘limited impact’ on Singtel’s gearing and thus ‘should not overburden’ the company.
However, the rights subscription could reduce the size of any potential special dividends from asset monetisation, CIMB noted.
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