After SingTel's successful listing of NetLink Trust (NLT) in July, SingTel has reduced its effective stake in NLT to 24.99%. In the process, SingTel received a huge windfall, with an excess of $1 billion in cash. There has been much speculation of whether a special dividend would be declared.
SingTel is expected to use some of these proceeds to pare down its debt or to expand its core business. As for the remaining IPO proceeds, I believe that there is a chance for a special dividend to be declared. The focus on my post would be to evaluate whether SingTel's ordinary dividend payout is sustainable, given that heightened competition in our local market is expected once TPG enters our local market as the 4th telco operator.
TPG's entry to heighten competition
With the local market saturated and TPG Telecom's impending arrival, telecommunications stocks here have taken a beating. While the share prices of...