Singtel is considering reducing its stake in Bharti Airtel by an additional 5% over the next three to five years. The proceeds from this potential sale are expected to be reinvested into Singtel’s core business or distributed as dividends. This strategic move aims to optimise Singtel’s investment portfolio and enhance shareholder value.
The report suggests that the HoldCo discount, which refers to the difference between the market value of Singtel’s holdings and its actual market capitalisation, is likely to narrow to below 15%. This is anticipated as Singtel continues to monetise its associate stakes, bringing the discount back to levels seen before the financial year 2018.
Analysts have maintained a “BUY” recommendation for Singtel, with a revised target price of SGD4.27. This adjustment is based on the anticipated reduction in the HoldCo discount from the previous 20% to 15%.
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