SingTel (Z74.SG) off 0.3% at $3.24 in light trade as improved dividend policy not enough to overcome concerns over earnings outlook after lower-than-expected fiscal 2Q11 results. 

“We see no growth catalysts,” says Kim Eng Securities, which has Hold call, reviewing $3.13 target; cites M1 (B2F.SG) as better bet for growth potential, Starhub (CC3.SG) for yield appeal. 

“The increase in dividend payout ratio is clearly good news, but the underlying net profit after tax is a disappointment and the extent of the Singapore margin compression a notable concern,” says Deutsche Bank, which has Hold call with $3.26 target. 

 

SingTel to raise dividend payout ratio to 55%-70% from 45%-60%. 2Q11 net profit down 6.7% on year at $892.2 million on losses from Indian associate Bharti’s (532454.BY) newly-purchased Zain Africa operations, related acquisition costs. Bottomline lower than $969.0 million tipped in Dow Jones poll. Firm support at $3.00.