Headwinds for SingTel's Expansionary Plans in the Region

In DBS Vickers securities' SingTel Report released recently in Nov 08, it wrote the following:

Quote: Regional associates below our expectations. Associate contribution was down 25.5% y-o-y compared to our estimate of single digit decline. Assuming no forex change from 2QFY08, associate contribution would have been flat. What surprised us was Bharti’s pre-tax earnings contribution, down 5.1% y-o-y, against our expectations of 10% growth. SingTel has attributed the decline to S$57m fair value loss on Bharti’s foreign borrowings. We did not see this item in Bharti’s results and need to check with management on the disparity. The other associates were more or less in line with our expectations.Unquote .

In addition, don't forget that SingTel is still facing some legal issues with its 35% stake in Indonesian Telkomsel. In our SingTel article sometime back, we also mentioned that Terria, a consortium led by Optus, which is bidding to build a part government-funded broadband network in Australia,has also recently lost a partner, Australian Capital Territory-based Internet provider, TransACT. And Ooops, it seems SingTel has a lower current asset base than its current liabilities.... It will be interesting to see how Group CEO Chua Sock Koong will navigate this company through these times

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