Recent Singapore news flow– positive but not significant: M1’s results suggest stabilisation of cyclical components of revenues and augur well for all players. Launch of iPhone 3GS is mildly positive for defending revenues.
Bharti's result on 23 July the near-term focus: Aside from results (forecast profit +23% YoY), focus is on any MTN deal commentary. We see potential Bharti-MTN deal as a negative for SingTel due to the complex shareholding structure (ie, SingTel's discount to parts should expand, in our view).
Core premium now at 20%: Implied core FY10E PER of 14.1x (historical average of 12.9x) is not compelling to us. Core (Sing/Optus) business, at 20% premium to our fair value estimate, is at the high of its historical trading range. 12-month price target: S$2.90 based on a Sum of Parts methodology.
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