Singapore’s most traded stocks of the Telecommunications Sector, Singtel, NetLink NBN Trust and StarHub, have averaged 2.6% total returns in the 2024 year to 5 April, on S$46 million of combined net institutional inflow. This means over the past 14 weeks, the Sector has seen the second highest net institutional inflow, after the Industrials Sector.
For price performances, StarHub has led the trio over the past 14 weeks, with an 8.1% price gain. The stock is also scheduled to go ex-div on 29 April with a 4.2 cents per share final dividend for FY23. This brings the FY23 total dividend for StarHub to 6.7 cents, above the previous guidance of at least 5.0 cents per share. StarHub released its FY23 Annual Report last week, highlighting that it is evolving from a traditional telecommunications provider to a dynamic digital ecosystem player, embracing cloud computing, cybersecurity, artificial intelligence, and IoT. For its FY23, StarHub achieved its DARE+ milestone of S$150 million in Net Profit Attributable to Shareholders (NPAT), a target set at the end of FY21.
StarHub also reported that its Return-on-Equity (ROE) for FY23 increased to 20.7% compared with 10.2% in FY22. Using standardised metrics, Refinitiv and the SGX Stock Screener calculates the StarHub ROE to be 25.8%. With the comparatively high 25.8% of StarHub, the trio average a 13.9% ROE ratio and an average Price-to-Book (P/B) ratio of 2.1x.
According to Bloomberg data, global communication large, mid and small cap stocks also maintain a comparable median P/B ratio of 2.1x, with a median ROE of 8.1%. The table below details more past performance and net institutional fund flows of the three stocks:
Most Traded Stocks of Singapore's Telco Sector |
Code |
Mkt Cap (S$M) |
5 April Px (S$) |
Px. Pct Chg. MTD % |
TR YTD (%) |
ADT (S$M) |
NIF (S$M) |
RCETP (S$) |
5 Y Ann. Total Return (%) |
ROE (%) |
P/B (x) |
Avg P/B 5Y (x) |
Div Yield (%) |
Singtel |
Z74 |
39,608 |
2.40 |
-5.1 |
-2.8 |
68.90 |
40.77 |
$3.06 |
-0.6 |
11.7 |
1.46 |
1.54 |
4.4 |
NetLink NBN Trust |
CJLU |
3,351 |
0.86 |
0.6 |
2.4 |
2.69 |
-3.82 |
$0.98 |
6.3 |
4.1 |
1.30 |
1.29 |
6.1 |
StarHub |
CC3 |
2,061 |
1.20 |
1.7 |
8.1 |
1.30 |
8.98 |
$1.24 |
0.2 |
25.8 |
3.62 |
3.94 |
5.6 |
Average |
|
|
|
-1.0 |
2.6 |
|
|
|
2.0 |
13.9 |
2.1 |
2.3 |
5.4 |
Total |
|
45,020 |
|
|
|
72.89 |
45.93 |
|
|
|
|
|
|
ROE measures how efficiently a stock has used its shareholder equity to generate profits. A higher ROE indicates the business has been more efficient in converting equity into profit. Note that ROEs are not forward looking and do not take into account profit guidance. The SGX Stock Screener standardised calculation for the StarHub ROE, is based on the FY23 profit after taxation, net of distributions paid on perpetual capital securities, while adding comprehensive income attributable to non-controlling interests. The SGX Stock Screener ROE is also based on an average of the equity attributable to owners and perpetual capital securities holders in 2HFY23 and 2HFY22.
The Singtel share price has been on the move since the end of Feb, gaining from S$2.35 on the 29 Feb close, to S$2.53 at the end of March, and back to S$2.40 on 5 April. Market speculation began in mid-March that Singtel was exploring some divestment or partial divestment of its Optus Australian unit.
Recent years have seen Singtel conduct strategic asset recycling with partial divestments of its international assets. This has included the divestment of a 3.3% stake in Airtel, the sale of Amobee to Tremor International, and the divestment of its 70% equity stake in Australia Tower Network. On 3 April, Singtel reiterated that there is no impending deal to divest Optus which remains a strategic and integral part of the Singtel Group.
Optus is the number two mobile player in Australia, with the key downside currency risk for Singtel shareholders a decline in the value of the AUD to SGD. In FY23 (ended 31 March), 52% of Singtel’s consolidated revenue was reported to Australia. Following speculation Singtel was potentially exploring some divestment of Optus, the ratio spread of the Singtel share price to the AUD/SGD currency pair soared to 2 SD above the 6-month mean, and reverted back to the mean at the end of last week.
Singtel shares have also seen more trading activity this year, with close to S$70 million of shares changing hands each day over the past 14 weeks, compared to S$50 million a day for the full 2023. Singtel completed its FY24 at the end of March, and is expected to report its full year financials around 27/28 May.
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