CGS-CIMB analysts have reiterated their “add” call and $3.30 price target on Singapore Telecommunications following the telco’s win for one of the five digital banking licences in Malaysia as part of a consortium with Grab Holdings and Kuok Brothers.
GXS, a 60-40 Grab-Singtel joint venture already holds a digital banking license in Singapore awarded in late 2020. GXS holds a 55.45% stake in the consortium that also includes Kuok Brothers. This gives Singtel an effective stake of 22.2% in the consortium, which is only likely to commence operations after going through a period of “operational readiness” over the next one to two years.
In their April 30 note, CGS-CIMB analysts Foong Choong Chen and Sherman Lam Hsien Jin describe this win as a “positive development” for Singtel, as it marks a meaningful regional digital banking business in the making.