$SINGTEL 10(Z77.SI)$So I have read and heard some people talk about buying into Singtel (Z77) listed on the SGX for dividend and (gasp) even growth play. The most common reasons cited are as follows: 

(1) “It is a GLC! [Govt-linked corporation] sure can make it!”

(2) “With 5G roll out and digital-banking license Singtel will do well in future”. 

Before you jump into the bandwagon and think Singtel is good for dividend play or growth play. Please consider whether this teleco (that is its major business) has hope of growth. If we look at it’s historical average, it seems to be on a downward trend (more or less). Why is this so? 

While Singtel is GLC, it has been slow to adapt to the advent of technological changes. With a relatively conservative (some might even say ‘boomer-mentality’) corp government Singtel has been slow to transform itself for the digital economy and seek out more profitable business ventures. While 5G roll out will be sure to help Singtel the massive capital costs will dim any profits of the company. Singtel has also been bleeding money in itsmajor Asian market-India as competitors (see reliance mobile) have been able to offer cut-throat prices to capture market share. Third, as for its digi banking license, I think that has most hope forgrowth but it is also indubitable that Singtel was relatively late to the game. Let’s look at all it’s competitors in the digital banking scene, they are far more aggressive in their marketing and have built up some clout. So any gains from its digi-banking business is also less than clear.

If you entering Singtel for dividends, ask yourself does this coy have enough profits (considering it has to channel some towards transforming itself)to give good stable dividends in future? If you are going in for expectation of growth, how much more can this company capture market share? Be it in Singapore or the wider SEA region. 

Happy to discuss further! [龇牙] 

As always, this is not financial advice or stock recommendation. Always DYODD.