CIMB Research said Singapore telecommunication firm StarHub planned $220 million bond issue is a potential step towards a special dividend or an increase in dividend payout.
StarHub shares were up 1.1% at $3.69 on Wednesday. The stock has increased 27% so far this year versus the 13% gain in the broader Straits Times Index.
CIMB said the bond issuance will be useful for StarHub given the impending spectrum action, probably in the first half of 2013.
StarHub’s existing dividend yield of 5.6% is already one of the highest among its regional peers, CIMB said, adding that the company’s dividend per share could rise to 22 Singapore cents in 2013 fiscal year, implying an even more “impressive” yield of 6.6%.
CIMB maintained its ‘’outperform’ rating and $3.90 target price on StarHub stock.
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