Increasing stake in Singtel by 250%

It's a day till the release of Singtel's 3Q result.
Anticipating it? Pretty much.

Some mini bloodshed is seen in the recent days across the global market. While there is no sufficient supporting reasons for such, it is looking more like a technical correction and the market has recover very briefly today. For now, I still feel that this market we are seeing today belongs more to the over-valued region than it used to be. 

Well. I should first apologize as the numbers on the title might look rather deceiving.
If I own 5000 shares of Singtel and doing so - Increasing stake by 250%, it will essentially means that I'm adding 12,500 shares or in another words, plonking S$43,000 into Singtel.

However, as much as I'd wish to say that, sadly, that's not the case. I guess I will need a couple of years more before I can write the same thing with a different set of results.

I did increased my stake in Singtel by 250% and had accumulated 360 shares of Singtel at 3.42
But, base on my holdings of 140 shares previously, this will only means that I've accumulated another 360 shares from Singtel.

Rounding them up to the nearest lot of hundred at 500 shares.
With this event in place, Singtel had became my greatest holdings at this moment.


Based on my poorly done TA post on Singtel, I've queued behind the support line of 3.42 yesterday and the trade was fulfilled shortly after the market opens.

Based on this entry price, it had brought my average price of Singtel down to 3.55 from 3.84 when I got in earlier last year. Based on the usual dividends of 17.5 cents that Singtel have been giving out for the past years, this price will translate to 4.92% yield on my average price or 5.11% yield on the price I've entered (3.42).

Attractive yield? Pretty much for Singtel. But the next question will comes in if they are able to continue paying off their dividend of 17.5 cents with their FCF. Many investors would have known that Singtel might be having some problem in ensuring sustainable dividend based on the recent years free cash flow. Nonetheless, I believe in Singtel's highly paid management team in doing the job.

For an investor like we are, we will need to know what is going on and how this management is doing their job. In the recent days, Singtel is also said to increase it's stake on Bharti Airtel to 39.5%.

"Singtel will be allotted up to 85.45 million new equity shares in Bharti Telecom at 310 rupees apiece, which will raise its stake by up to 1.7 per cent for a total consideration of around 26.5 billion rupees (S$545 million).

The allotment, expected to close by next month, will see Singtel's economic interest in Bharti Airtel increase by 0.9 percentage point to 39.5 per cent.

...

Singtel's total stake in Bharti Telecom will increase to 48.9 per cent with this current investment, according to a press statement by Bharti Airtel."  - from Straits Time


As an investor, I view this move by Singtel to be a move for the longer term, which will be paid off in the next couple of years. With the intensive price war today in India's telco market, I believe that we will be able to see a couple of reds in the next few financial reports.

Singtel's 3Q result will be released in hours time, and we will be able to take a look at it when we wakes up tomorrow! If the results is poor, we should be able to see the support lines be retested once again.

Sigh.. this silly devil here is trying to buy before the results..


Attentive readers will find out that this purchase will not look like a nibble if I were to base this purchase on the weight of my portfolio. However, on my side, I'm trying to increase the amount of shares purchased each time in the late few trades to further reduce on transaction cost.

Time to strap my hands to myself!! No more itchy hand.. no more..

Read:
Singtel's Technical Analysis
Singtel - Special Dividend of 3.0 cents per share

ST News on Singtel increasing it's stake on Bharti Airtel can be found here