SingTel

SingTel: CS reduces its TP to $4.05 (from $4.25) and maintains its OUTPERFORM rating for SingTel. The reduction was due to reflect more bearish FX assumptions, supported by a 4.7% FY3/14 dividend yield. The AUD and INR depreciation relative to the SGD during 2Q13 would affect Group’s contributions from Optus (24% of profit) and Bharti (10% of profit) particularly into 2Q3/14E. CS revise our FX assumptions to reflect a more bearish view on the AUD. These changes feed through to 3.4-3.9% downward revisions in FY3/14-15E underlying EPS. Despite FX headwinds, CS would focus on SingTel’s operational improvements both at its core businesses and across four key regional associates. Optus’s revised mobile plans are a clear effort to improve data monetisation while its cost measures have not been fully reflected in margins yet. House also remain bullish on improving regulatory clarity and RPM increase momentum in India which could more than offset the currency impact on Bharti.