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Sing Tel has a special dividend potential of Sg18 cents per share in the next 2 years, says Nomura

“We don’t expect a special at the upcoming FY13 result this May, but expect it for next year (FY14). The last ‘special’ was in FY11, and management then stated that the next one will be reviewed in 3-years, i.e. May-2014,” says Nomura Equity Research

For Sing Tel, based on various ‘cash-in’ and ‘cash-out’ sources over the next 24-months, there is up to Singapore 18 cents (per share of Singapore $1) special dividend potential (largely from its under geared balance sheet). But realistically another Singapore 10-12 cents is likely, which is an additional 3% yield to its current ordinary dividend yield of 5%.  This is according to a Quick Note from Nomura Equity Research. Sing Tel is important to investors in India as it has a 32.25% equity stake in Bharti Airtel.

 

“We don’t expect a special at the upcoming FY13 result this May, but expect it for next year (FY14). The last ‘special’ was in FY11, and management then stated that the next one will be reviewed in 3-years, i.e. May-2014,” says Nomura Equity Research.
 

While projecting future cash flows for Sing Tel, Nomura analysts predict Singapore $6 billion ‘cash-in’ and Singapore $2 billion ‘cash-out’ over the next two years. Divestment in NetLink Trust could realise around Singapore $1.4 billion. Spectrum payment in Australia of Singapore $1.5 billion (payment will be in FY15), and spectrum payment in Singapore of around Singapore $100 million are the major cash outflows.

 

The above scenarios result in a net ‘cash-in’ of Singapore $4.5 billion versus Nomura’s ordinary dividend estimate of Singapore $5.6 billion over the next two years (on 75% payout ratio). The cash flow projections for FY13 and FY14 are given in the table below:
 

On a futuristic note on Sing Tel, during its recent investor day, the company stated that “everything is zeroing into mobile, so mobile internet is the way to go” and that’s where SingTel is looking to capitalize on its 480 million regional mobile subscription. For this, Digital Life is a key growth focus for the group. So far, around Singapore $500 million has been invested across 32 businesses in seven countries at the group level.

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Lok Sabha passes Union, Railway Budgets without debate amid Oppn walk-out

The passage of the General and Railway Budgets was rushed through as the guillotine had to be applied to meet the constitutional requirements

The government today ruled out imposition of wealth tax on agriculture land as the Lok Sabha completed the budgetary exercise in an unusual way with Finance Bill and Demands for Grants for various ministries being passed without debate after Opposition walkout.

 

Finance Minister P Chidambaram also exempted the Indian Railways from payment of service tax for period between 1 July 2010 and 1 October 2012 to avoid burden on the state-owned enterprise.

 

Making a brief statement while moving the Finance Bill for voting, he introduced an amendment on the issue of wealth tax in view of misapprehensions as to whether it will apply to agriculture land.

 

“There was apprehension that wealth tax was being imposed on agricultural land. Let me make it absolutely clear that the policy of the UPA government is not to impose wealth tax on agriculture land,” he said.

 

The apprehensions arose on account of judgements following Punjab and Haryana High Court rulings, Chidambaram said, adding he had worked hard yesterday to prepare the amendment and obtain the approval of the president and “the matter should come to an end.”

 

The passage of the General and Railway Budgets was rushed through as the guillotine had to be applied to meet the constitutional requirements.

 

As per rules, government had to get all money bills related to the Union Budget passed within 75 days of the presentation of the Budget. Since these four Bills will have to go the Rajya Sabha and then to the President for his assent, it was crucial for the government to get Lok Sabha's approval by 30th April to meet the deadline.

 

BJP earlier staged walk-out over the coal issue, while Left, BJD and AIADMK left the House to protest against passage of important bills without discussion. DMK too walked out demanding removal of the JPC chief P C Chacko.

 

After the walk-out, Speaker Meira Kumar said the passage of crucial bills without debate was being done in a “very difficult condition” and it was “immensely painful” for her.

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