SG: MARKET PULSE: Telco sector (4 Oct 2013)

Stock Name: SingTel
Company Name: SINGTEL

Research House: OCBC

Price Call: HOLD

Target Price: 3.81

Stock Name: StarHub
Company Name: STARHUB LTD

Research House: OCBC

Price Call: SELL

Target Price: 3.82

MARKET PULSE: Telco sector

4 Oct 2013

KEY IDEA Telco Sector: MDA explains BPL ruling In a report recently, MDA (Media Development Authority) explained that it forced SingTel to share its BPL (Barclays Premier League) content as the telco had made it "commercially unviable" for StarHub to separately purchase the rights. The cross-carriage ruling resulted in the two telcos offering hefty "subsidies" to either lure subscribers to switch or retain subscribers. But we do not expect the migration of Pay TV customers from SingTel to StarHub to be significant, given that it may still be cheaper for existing subscribers to watch BPL on the mio TV platform. We have a NEUTRAL rating on the sector, with a HOLDon SingTel (S$3.81 FV) and SELL on StarHub (S$3.82 FV). (Carey Wong)

For more information on the above, visit www.ocbcresearch.comfor the detailed report.

NEWS HEADLINES - US stocks closed lower Thu after bouncing off intraday lows following a report that House Speaker John Boehner is determined to prevent a federal default as the Treasury Department warned that such a default would have potentially catastrophic effects. - M1 has been slapped with the industry's largest fine on record in the country's history - S$1.5m - for the disruption of its 2G and 3G mobile phone services in Jan. - China Gaoxian Fibre Fabric Holdings might have resumed trading on the SGX but its past has returned to haunt it, with a Korean regulatory authority fining it S$2.3m over a securities registration statement lodged in 2011. - CapitaMalls Asia and Sime Darby Property yesterday began the construction of their shopping mall on prime commercial land in the Taman Melawati commercial area north-east of Kuala Lumpur. - Hiap Hoe Ltd has entered into an MOU with Probuild Construction (Aust) Pty Ltd to pursue JV opportunities for the group's recently acquired sites in Pearl River Road and Lonsdale Street in Melbourne, Australia.