What could Singtel get from the Netlink Trust listing?

There will be room for higher dividends.

The impending listing of Netlink Trust would unlock and crystallise the value of the owner and developer of fiber assets for Singtel.

According to RHB, the listing came following a ruling by the Infocomm Media Development Authority (IMDA) for Singtel to pare down its stake in NLT to less than 25% by Apr 2018.

"There is a possibility that Singtel may return additional cash from the sell-down of NLT (14-15 cents/share), possibly to be declared in 4Q18 (May). Our current DPS forecast assumes 18 cents/share for FY18, which implies a payout of 70% (management’s on-going guidance is for a 55-70% payout from its core earnings) and dividend yield of 4.7%. This could rise to c.8% in the event of a special dividend. Singtel last paid a special dividend of 10 cents/share in FY11," RHB said.

More so, RHB said some of the key upside risks are less intense competition in the key mobile markets of Singapore, Australia, Indonesia and India, a faster turnaround of its digital businesses, and a lower than expected capex.

NLT would be the second business trust to be listed on the Singapore Exchange (SGX) after Hutchison Port Holdings Trust in 2011.