Singtel shares surged yesterday on news that its Australian telco unit has acquired licences that will allow it to expand its 4G high-speed network in the country.
The stock rallied 6.3 per cent or 22 cents to $3.70, with 47.7 million shares traded, making it one of the day's most heavily traded counters.
Its robust performance helped the Straits Times Index rebound 2.53 per cent or 64.72 points to 2,623.21.
Traders were presumably "positioning plays" ahead of the Chinese New Year holiday weekend, remisier Alvin Yong said. "That means they were either covering shorts or buying in anticipation of a bigger rally. This could be because our market has been heavily shorted," he added.
UOB KayHian analyst Jonathan Koh noted that Singtel is the largest and most liquid defensive stock on the Singapore Exchange and "deserves to trade at a premium".
"Singtel is the least affected by a fourth mobile operator in Singapore as overseas businesses account for about 70 per cent of its bottom line," he said.
The Singtel rally was fuelled largely by news that its unit Optus has acquired new regional licences for its 4G network for an outlay of A$196 million (S$197 million).
"The acquisition means Optus is well placed to expand its 4G network coverage to more places around Australia," the company said in a statement yesterday.
Optus chief executive Allen Lew said: "The use of common frequencies between metropolitan and regional areas will help reduce dead zones across urban and rural boundaries and give customers a seamless 4G experience when they're on the go."
Mr Koh, in his report, also said Singtel will benefit from growth at its regional mobile associates, such as Telkomsel in Indonesia, Bharti Airtel in India, Advanced Info Service in Thailand and Globe Telecom in the Philippines.