SingTel

SingTel: On a recent management roadshow in US, questions were focused on group's operating outlook in Singapore & Australia, dividend potential in light of its higher capex phase, Digital Life, Associates’ outlook, Optus satellite sale and potential Myanmar investment. Nomura notes that management clearly doesn’t see itself as an ex-growth company and is willing to acquire growth which complements its extensive sub-base, access and network ubiquity. It emphasised a number of times that ‘scale matters’ and SingTel and its Associates are working a lot closer to exploit this in the digital/ data world. Moreover, cost control, through operational inefficiencies or measures like subsidy reduction, is also a key focus in its developed markets. Nomura remain positive on SingTel as it is rare for most of its businesses to perform at the same time, which House believe is happening now. SingTel is a traditional defensive with a good dividend yield and 6-8% EPS growth now (after 3 years of declines). Nomura maintains BUY with TP of $4.50.