A relatively quiet week with telcos in focus

Date: August 18, 2025

• The STI fell 9 points or 0.2% to 4,230.53
• Wall St now pricing in 92% chance of Sep rate cut
• City Dev reported 3.9% 1H profit rise to S$91.2m, special interim dividend proposed
• Exceptional gains boost Singtel’s 1Q profit 31.7.4% to S$2.9b
• Keppel to sell M1’s telco business to Simba for S$1.43b; Starhub’s shares take a hit
• StarHub’s 1H profit down 41.7% to S$47.9m
• Dezign Format gained 40% in its Catalist debut
• CNMC Goldmine’s shares rose 17.3% last week

Banks were mixed as the STI slipped 0.2%

The Straits Times Index fell 9 points or 0.2% to 4,230.53 last week, ending lower on four of the five trading days. Average daily volume was S$1.67b versus S$1.73b in the previous week.

Banks posted a mixed performance. DBS lost S$0.84 or 1.7% at S$49.90 whilst UOB also fell, down S$0.36 or 1% to S$35.34. However, OCBC managed a net gain of S$0.11 or 0.7% at S$16.90.

Wall Street is betting on a Sep rate cut

Although the core US consumer price index in July came in hotter-than-expected on a year-on-year basis and while the producer price index readings were higher than expected,  after a weak July nonfarm payrolls reading earlier this month, market participants see this week’s inflation data as pointing to a September rate cut – as of Friday, the probability that rates will be lowered by 25 basis points next month stood at 92%.

Developments between Russia and Ukraine also took centre stage this week. U.S. President Trump and Russian leader Vladimir Putin convened in Alaska on Friday, and Trump later described the meeting as “very productive,” even though there was no agreement to end a war that has raged for nearly three and a half years.

For the week, the S&P 500 climbed 0.9%, while the tech-heavy Nasdaq Composite gained +0.8%. The blue-chip Dow Jones Industrial Average added 1.7%.

City Dev reported 3.9% 1H profit rise to S$91.2m, special interim dividend proposed

CDL’s first half of the year net profit rose 3.9% to $91.2 million, with revenue up 8% to $1.69 billion, driven mainly by the Copen Grand project. A special interim dividend of S$0.03 per share was proposed, with significant gains expected from divestments, particularly South Beach.

Chief executive Sherman Kwek told a briefing that CDL will try to pay one-third of its net income as dividends every year.

He added that when the firm has a “nice bonanza with big divestments, we will try to reward our shareholders more. But on the whole, every year, we try to stick to a one-third payout ratio”.

“I think we have had a track record where whenever we have had strong years, we always tended to reward our shareholders handsomely, he said.

“This year, we are expecting quite an outsized divestment. So hopefully we will have a nice surprise for all of you.”

Other than the Copen Grand project, other contributing projects included The Myst and Norwood Grand, as well as joint ventures Canninghill Piers, Tembusu Grand, The Orie and Kassia.

Mr Kwek said the results could have been better if not for the S$63.1 million unrealised net foreign exchange losses incurred in the first half following the depreciation of the US dollar against the Singdollar. The impact is unrealised, so the position will reverse if the US dollar appreciates.

If the exchange effects were excluded, CDL’s net profit for the first half would have jumped 322.7 per cent year on year to $154.3 million.

On Wednesday, CDL’s shares surged S$0.45 or 7% to S$6.80 in response to the earnings and special dividend announcement. They finished the week at S$6.73.

Exceptional gains boost Singtel’s 1Q profit 31.7.4% to S$2.9b

Singtel reported a higher net profit for its first quarter ended Jun 30, 2025, at S$2.9 billion, up 317.4% from S$690 million in the year-ago period, mainly from exceptional gains amounting to around S$2.2 billion from the sale of its partial stake in Airtel and the Intouch-Gulf Energy merger.

Meanwhile, Singtel’s underlying net profit rose 13.9% to S$686 million.

Other factors that contributed to Q1 improvements included the higher earnings before interest and tax (EBIT) of its Australian unit Optus and its technology services arm NCS.

Optus recorded a 36% year-on-year rise in EBIT to A$133 million (S$111.4 million) driven by revenue growth and disciplined cost management, while NCS posted a 22% year-on-year increase in Ebit to S$79 million from higher delivery margins.

Over the week, Singtel’s shares rose S$0.12 or 3% to S$4.10. HSBC held its “buy’’ recommendation, forecasting a 1.4% increase in net profit for financial year 2027 underpinned by growth in Singtel’s data centre capacity and increased revenue for Optus.

CGS International maintained its “hold’’ call, saying that significant asset monetisation exercises and increase in profits in key markets could be met with a sharp Singdollar appreciation, a well as increased competitive pressures and regulatory shifts in core markets.

Keppel to sell M1’s telco business to Simba for S$1.43b; Starhub’s shares take a hit

Keppel proposed to divest M1’s telco business to mobile network operator Simba Telecom for an enterprise value of S$1.43 billion, in an all-cash deal surprising observers who had expected the sale to go to Starhub.

Keppel will receive close to S$1 billion in cash for its 83.9% effective stake in M1. The deal will, however, result in an estimated S$222 million accounting loss for Keppel due to goodwill and intangible assets associated with the telco business. Keppel first invested in M1 in 1994, and was later involved in its privatisation in 2019.

While Keppel seeks to make an accounting profit in its deals, “in this instance, what’s more important is that we have a narrative” aligned with the “New Keppel”, said Keppel chief executive Loh Chin Hua, referencing the company’s effort to divest non-core assets.

“Our narrative is that we’re going to create an asset-light ‘New Keppel’, and this particular business is no longer core to us, so being able to monetise it is probably the most important,” he told analysts and reporters at an online briefing on Monday.

Simba Telecom had put forward the strongest bid among interested parties, Keppel said in a statement. The deal’s enterprise value is 7.3 times EBITDA (earnings before interest, taxes, depreciation and amortisation), which Keppel described as an “attractive” valuation.

M1’s telco business had revenue of S$806.1 million and S$195.4 million in Ebitda for the 12 months to Apr 30, Simba’s parent company Tuas disclosed in a separate press release.

In reaction to the announcement, Starhub’s shares plunged on Monday, losing as much as S$0.08 or 6% before closing S$0.06 or 4.9% lower at S$1.16 on volume of 9.1m. They closed Friday at S$1.18, down S$0.04 or 3.3% for the week.

Keppel’s shares in the meantime fell S$0.27 or 3.2% to S$8.31 on volume of 14m on Tuesday. They finished the week at S$8.45 for nett loss for week of S$0.13 or 1.5%.

StarHub’s 1H profit down 41.7% to S$47.9m

StarHub’s net profit fell 41.7% to S$47.9 million for the first half ended 30 June, the figure includes a one-off forfeiture payment of S$14.1 million for the return of certain spectrum rights. Earnings per share declined 43.8% to S$0.026.

The drop in earnings comes despite revenue rising 2.2% to S$1.13 billion in H1 from S$1.1 billion, thanks to higher contributions from its broadband, regional enterprise and cybersecurity services. Revenue from these segments rose 4.4, 6.8 and 20.1% respectively.

The telco separately announced that it is buying the rest of MyRepublic’s broadband business that it did not already own for S$105.2m, making the latter now a wholly-owned subsidiary.

The Business Times quoted an RHB analyst describing the deal as a “pre-emptive move by StarHub to circumvent competitive manoeuvres following Simba’s acquisition of M1”.

“The StarHub-MyRepublic deal gives StarHub full brand ownership and oversight of MyRepublic,” the analyst added.

Dezign Format gained 40% in its Catalist debut

Spatial design specialist Dezign Format’s recorded a solid Catalist debut on Friday, closing at S$0.28, S$0.08 or 40% higher than its S$0.20 offer price.

Dezign Format’s placement of 32.5 million shares at S$0.20 apiece raised S$6.5m and the shares were fully subscribed as at noon on Wednesday.

Mike Chong, the company’s executive chairman and chief executive, said: “The proceeds from this offering will support our regional expansion strategy, including the establishment of our Malaysia production facility and sales offices in Thailand and Vietnam.”

The group’s investors include Asdew Acquisitions, Lion Global Investors, Maybank Asset Management Singapore and Nikko Asset Management Asia.

Dezign Format’s IPO is the fifth listing that the local bourse has had this year, after those of automotive solutions provider Vin’s Holdings, Info-Tech Systems, NTT DC Real Estate Investment Trust and Lum Chang Holdings; there was also a secondary listing by China Medical System.

CNMC Goldmine’s shares rose 17.3%

CNMC Goldmine’s shares surged S$0.095 or 17.3% to S$0.645 last week during which the company reported a record net profit of US$15.8 million for the six months ended Jun 30, 2025.

Fuelled by soaring gold prices and higher production, this marked a 256.1% surge from its US$4.4 million net profit in the year-ago period.

The company recorded a 26% year-on-year increase in gold produced from its carbon-in-leach plant, which stood at 11,811 ounces for H1.

Additionally, it recorded an average selling price of US$3,197 per ounce of gold produced in the half-year, 41.1 per cent higher than the price of US$2,266 per ounce in H1 2024.