Singapore telcos have been largely unaffected by past crises and we expect it to be no different if Grexit sparks off a new crisis. Telco services are fairly low-ticket items and are considered by many consumers as non-discretionary spending. Instead, investors are likely to be more concerned about the possible entry of a fourth mobile operator.
We stay Neutral on the sector as valuationshave yet to drop to truly attractive levels and we remain concerned about a possible knee-jerk reaction should the entry of a new mobile player into Singapore be confirmed.
We maintain a Hold call on SingTel, StarHub and M1.
We prefer Telkom, Thaicom and Indosat for ASEAN telcos.
Read more »