OIR BITES: Temasek to sell 400m SingTel shares

Stock Name: SingTel
Company Name: SINGTEL

Research House: OCBC

Price Call: BUY

Target Price: 3.61

For OPSL clients ONLY

OIR BITES: Temasek to sell 400m SingTel shares 26 Sep 2012

Temasek Holdings has entered into an agreement to sell 400m shares in SingTel as part of its portfolio rebalancing that it does from time to time. According to BT, the sale is for 400m shares at a price of S$3.22-3.25 each, or a discount of 2.4-3.3%, and it comes with an upsize option of 100m shares. BT also reported that the sale was a result of a "reverse inquiry" from bankers. If 500m shares are sold, Temasek's stake in SingTel will fall from 54.4% to 51.3%, still making SingTel the largest company in Temasek's portfolio by market capitalization. We do not think that the share sale is any indicator of SingTel's business prospects - and we also believe that it is just part of a normal portfolio rebalancing, given that SingTel is up 6.7% YTD. We have a BUY on SingTel with a fair value of S$3.61; and we are also expecting a dividend yield of ~5% for this FY ending Mar 2013.

Best Regards, Company Registration No: 198301152E