Telcos

Telcos: There will be no 4th telco in Singapore. Registration for the remaining 3G spectrum has closed with only one bid each from incumbents SingTel, M1 and StarHub. The intended auction for 3G rights will not take place, and each of the three lots will be allotted at the reserve price of $20m apiece…

This outcome is not unexpected. In line with the Street, we had previously mentioned that chances of having another telco were slim as the local mobile scene is mature and the incumbents have entrenched customer bases. Nevertheless, news is still positive, and all 3 telco counters may get lift today, as competition remains status quo…

StarHub: Deutsche, Daiwa top picks. But Street views mixed with good range of Buys, Sells and Holds. Target prices range $2.14-2.90. Stock showing strong momentum, now at 2-yr high. A successful break above $2.60 could see stock move toward next resistance at $2.80.

M1: Citi’s top pick. Majority of Street tips as Buy. Targets range $2.50-2.68. Stock has been a laggard during the recent market rally. Long term trend is positive, and Stochastics are emerging from oversold levels suggesting positive momentum in the near term. Stock may test 2-yr high of $2.30. Support at $2.17 (50MA).

SingTel: Majority of Street rates as Hold. Targets range $2.88-3.71. Stock still range bound. With Stochastics in overbought territory, and RSI pointing downwards, near term outlook does not look promising, and stock may continue to underperform the broader market.