Singtel, StarHub and M1 – Affected by government policy

The writing was on the wall. There is going to be a fourth mobile telco for Singapore. Back in 11 May 2015, Minister for Communications and Information Yaacob Ibrahim first mentioned in Parliament that if there were to be a fourth mobile telco operator, it must be able to spur competition and benefits the consumers.

On first of this month, IDA had said that three firms had submitted Expression of Interest to be the fourth telco. Auction of spectrum is likely to be in Q3 this year and the fourth telco operating in April 2017.

This is one government policy that has a direct impact on the operations of the three existing telcos, namely Singtel, M1 and StarHub. Yet I did not take heed. I bought additional Singtel shares on 2 June 2015. I also bought additional M1 shares on 31 July 2015. I still own shares in all three telcos because of their good dividends.

Between the time when the Minister spoke about the fourth telco (11 May 2015) and last Friday, the share prices declined. The biggest loser was M1, dropping 24.5% followed by StarHub losing 12.8%. Singtel lost only 3.9%.

Counter Date Share price ($) Change (%)
Singtel 11 May 2015 4.07
16 Sep 2016 3.91 -3.9
M1 11 May 2015 3.26
16 Sep 2016 2.46 -24.5
StarHub 11 May 2015 3.97
16 Sep 2016 3.46 -12.8

Lesson I learned from this is that one must keep tab of government policies that can impact businesses. I am still holding on to M1 shares and StarHub shares as I have missed the opportunities to reduce.

Copyright © 2016, limkimtong for Living Investment

The material presented is intended to be general and written in layman’s language as much as it is possible. The author shall not be liable for any direct or consequential loss arising from any use of material written. Please seek professional advice from your financial advisor or financial institutions on material written covering financial matters.

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