SingTel – Lim and Tan

• Strip out the exceptionals (largely gain from sale of AFS Investments), underlying profit actually fell 3%, instead of the 3% gain as reported for Q1 ended Jun '12.
• Optus Australia and pedestrian performance by associates (dragged down by Bharti of India, which recently reported a sharp earnings slide) are to blame,
• We remain Neutral, preferring StarHub for its more attractive yield: 5.4% at $3.72 vs Sing Tel's 4.7% based on 15.8 cents paid in respect for ye Mar '12.
• The recent strong performance of Sing Tel: share price hitting a high of $3.62 after a clear dividend policy was spelled out, is largely over.