Phone Operators Rally on Outlook for Dividends: Singapore Mover

Singapore’s phone companies rallied, with M1 Ltd. and StarHub Ltd. (STH) rising to all-time highs, as investors turn to these stocks on their outlook for cash flows and dividend yields.

M1, the smallest of the three mobile-phone carriers in the city-state, jumped 3.7 percent to S$3.33 as of 3:02 p.m. in Singapore, and StarHub, the second-biggest, climbed 1.9 percent to S$4.73. Singapore Telecommunications Ltd. (ST), Southeast Asia’s biggest phone company, added 2.1 percent to S$3.92, poised for the highest close since April 2008.

“We like the telecommunications companies because they offer attractive dividend yields of above 4 percent,” said Ken Ang, an analyst at Singapore-based brokerage Phillip Securities Pte. “That’s higher compared to the average dividend yield of the Straits Times Index. The stable cashflows of the telcos should support higher dividends.”

M1 offers the highest dividend yield of 4.3 percent for the next 12 months, followed by StarHub at 4.2 percent and SingTel at 4 percent, according to data compiled by Bloomberg. Shares on the Straits Times Index offer a dividend yield of 2.9 percent, the data show.

StarHub and SingTel may post declines in quarterly earnings next week, according to analyst estimates compiled by Bloomberg. M1 reported a 1.7 percent increase in first-quarter profit on April 16.

To contact the reporter on this story: Jonathan Burgos in Singapore at jburgos4@bloomberg.net

To contact the editor responsible for this story: Nick Gentle at ngentle2@bloomberg.net

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