DBS Equity Picks
Starhub Ltd: Remove from Dividend category
While one of our investment thesis for Starhub is the anticipated mobile recovery in FY22F, we decide to switch out to focus on SingTel as our preferred telco pick for Singapore as the latter (1) currently trades at a historical steep c.35% holding company discount, (2) offers about 4% yield that should grow with 9% annual earnings growth over FY22-24F, and (3) has an estimated S$2bn worth of divestments from digital advertising, Trustwave & Property as a potential price catalyst. Starhub shares returned 3.91% since inclusion, SingTel shares returned 5.5% (CD) since inclusion. SingTel remains in our equity picks.
Trending Sector
Regional Reopening Stocks
When will Singapore follow Australia’s footsteps?
- The Australian government announced plans to reopen the country to vaccinated visa holders from 21 February
- The move comes as new COVID-19 cases in Australia decreased to its lowest since the new year
- Stocks that have meaningful hospitality businesses in Australia (FHT, ART, Tuan Sing) could stand to benefit with a return of tourists
- Governments in the region are notably also moving towards a wider reopening of borders
- Countries including Malaysia, New Zealand, Thailand, Vietnam, and Bali in Indonesia have announced plans or hinted at relaxing borders in 2022
- With 93% of eligible population fully vaccinated and 60% of total population received the booster shot, Singapore is also expected to eventually allow quarantine free travel for all vaccinated travelers
- Our guess is this may happen after the current Omicron wave peaks and comes down
- We believe the Singapore air hub could take off with a regional reopening with SingaporeAirlines and SATS being prime beneficiaries, others include CDL HT and FEHT