Stock Upgraded: Singtel fair value at 2.91 by UBS!

UBS Investment Research said it has raised its fair value for Singapore Telecommunications (SingTel) to 2.91 sgd per share from 2.82 sgd after the company announced sterling results for the year to last March and a 4.0 bln sgd pay-out to shareholders. "Post the announcement of its strong year-to-March-2006 results and an attractive 4.0 bln sgd pay-out to shareholders, SingTel's current share price weakness is unwarranted," UBS said in a note to clients. "We believe the stock should trade closer to our revised price target of 2.91 sgd," it said. However, UBS said it is keeping its "neutral 1" rating for SingTel, given expectations that margins of unit Optus will remain under pressure. UBS expects SingTel's net profit to ease to 2.77 bln sgd in the year to next March from 4.16 bln sgd the year before, but to increase to 3.03 bln sgd in the year to March 2008 and to 3.25 bln sgd in the year to March 2009. At 10.11 am, SingTel was flat at 2.69 sgd, with 18.07 mln shares traded.