My Recent Purchase's Share Price just went Down today. :(

If you have read the earlier post about my April's purchase (link here), you would know I just bought Singtel's shares last week at $3.87. As of today, it is down to $3.82 (-1.55%). Alamak, Simidaiji (Oh dear, what happen)?

I quickly check for possible Singtel's announcement that could trigger the price drop. There's none. Next I went to Investing Note forum where the stock experts (武林高手) gather and give stock guidance and coverage. Within 1 minute, I got my answer. TPG is the culprit!

Next, I googled for TPG news. From what I have found, TPG is planning to build their own mobile network in Australia. It is currently operating as a Mobile Virtual Network Operator (MVNO) and leasing mobile network resources from Vodafone in Australia. They have successfully bid for 2 x 10 MHz spectrum for $1.3B. Telstra, the largest mobile operator in Australia's share price went down by 6% at market open! Optus which is Singtel's subsidiary and second largest operator in Australia did not secure any spectrum during this bidding war. Source: here

My Thoughts On TPG

From what I understand, TPG does not have the experience of building and maintaining a mobile network. They will sure offer high salaries to recruit expertise in these areas. They need to invest a lot in spectrum bidding, mobile infrastructure and skilled expertise. So how low can their subscription plan go in order to compete with the existing Telcos? For mobile subscribers who need reliable network coverage for work and leisure, would they jump ship to TPG? Take note TPG can only operate on 4G spectrum so if the network coverage is poor in that area, the phone signal will not switch to 3G. Just no network coverage. If it's 4G core network goes down, any redundancy? Do they have more cash to burn for 5G mobile network? I wander how's Circles.Life doing. It is riding on M1's 4G network so at least there is some sort of quality assurance.

My Thoughts on Singtel

Back to Singtel. I took a look at Singtel's revenue from it's subsidiary, Optus. It has been going downhill. The impact from TPG could made a further dent in it's earnings in a few years time. I hope the company has some strategies to counteract moving forward.

Would I load up on Singtel? The price will need to go lower to entice me. Even if the price drops to $3.70, the dividend yield would be around 4.73% which is not a big jump to my current yield. I would wait for the analysts to give their expert views on Singtel before making any decision on my next purchase price. 😛

My First Purchase for April...And The Rationale behind it.

I did my purchase for April on Friday. I bought 2000 shares of SingTel at $3.87. I currently owned 3000 SingTel shares under my CPF Investment Portfolio. My previous purchase price was $3.77.
Wah...averaging up. When SingTel was trading above $4 recently, I had keyed in my Interest Price in my Excel Spreadsheet as $3.95 but I didn't buy when the price was breached. Heng ah.

Next...The Big Question..Why did I buy SingTel?

Dividend
The dividend payout ratio for the last few years is within the 70-73% range. M1's last 2 years payout ratio is 95-99% range while StarHub's last 5 years is 90-101% range. Ouch! In my opinion, SingTel has the capability to maintain and grow it's current dividend compared to the other 2 telcos. Assume the dividend is maintained at 17.5 cents, based on my purchase price of $3.87, my dividend yield would be 4.52%. But wait, SingTel shareholders may receive special dividend with the upcoming Netlink Trust IPO. Don't take my word for it. Check out the source here. On a side note,  MM2 Asia just launches Unusual IPO this week. MM2's share price was up by 9% on Friday! I can't say it's due to the IPO but there's no special announcement from MM2 Asia that could explain the 9% jump in share price. What an unusual move! Hopefully, NetLink Trust IPO could give a boost to SingTel's share price.

4th Telco Impact
The upcoming 4th Telco would have the least impact on SingTel. According to the 2016 Annual Report, over 70% of their earnings is from overseas operations.

Market Cap
If we compare the second largest telco StarHub against SingTel, the market cap of StarHub is $4.9B vs SingTel's $63.3B. I am buying shares of a much larger company with overseas business. The closing price of StarHub was $2.84 on 7-4-2017. Sounds like a good deal. I like.😀

Who's been Buying/Selling?
I also like to check who's been buying and selling the company shares recently before I trade. The fact that CEO and Director of the company has been buying the company shares certainly give confidence to investors about the company.

Using Spiking app, Temaseks purchase in Nov was $4.163. I am undercutting Temasek. 😀

In contrast, M1's CEO has been selling her company shares in recent years. I am an M1 shareholder and I am unhappy about it. What kind of signal is she sending to investors?

Karen ah Karen, this year need to rebalance stock portfolio or not?

Analysts' Forecast 

I used the app My SGX to check on analysts' forecast for SingTel.

 It's a BUY according to analysts from OCBC and UOB KayHian

From the site markets.ft, huge upside potential

In my opinion, SingTel is a company that would still be around for the next 10 years. It is a company that I could invest for long-term without losing sleep. I am prepared to accumulate on further price weakness. 

With this single purchase, I have clocked the higher interest rate for my DBS Multiplier account in April. I blogged about this account in this Post. Buy shares and earn interest at the same time. Shiok ah! 😁