Singtel

Singtel: Telkomsel, Indonesia’s biggest telecom firm, said that Singtel is willing to sell its 35% stake back to Indo’s govt. The move comes as Telkom struggles to boost profits in a once-fast growing mobile market that is now seeing heated competition. Add that Singtel is willing to sell the stake but it depends on the value and its structure.

Telkomsel is Indo's biggest mobile firm with more than 100m subscribers at the end of 1Q11, and has so far been an effective ‘cash cow’ for Singtel. However, there have been no indications from SingTel publicly if it was willing to sell its stake.

Meanwhile, Macquarie reiterate O/p, with TP $3.55 tipping grp as a defensive core, emerging growth. Top pick in SG telecoms sector for its defensive qualities with the added benefit of upside from positive pricing and regulatory developments in India.

At 17x FY13E P/FCF and 5.6x adj EV/EBITDA SingTel valuations are compelling taking into consideration its 5% net dividend yield and 8% FY11-14 EPS CAGR. SingTel’s 5% net div yield provides defensive qualities in the current market conditions while looking forward to when the market takes on risk.