SingTel

[weijian]

To be honest, I am not so sure if releasing these shares from CPF to CDP custody is a net positive for SingTel and minorities.

First, I would presume that with the effective shareholder count increased by 10x (previously, you were only dealing with a few custodians - the banks whom CPF assigned custody to. But now with CDP, you are dealing with individuals), the charges that Singtel will have to pay to CDP/Boardroom etc for its various corporate actions (dividends etc) will also increase. Of course, this is probably not a lot. But it is significant enough that Capitaland Investment only pays dividends once a year to save on such costs.

Next, there is the Inelastic Markets Hypothesis which states that fund flows in/out of market have a multiplier effect of 5x of the aggregate value. This was recently made popular by Terry Smith in his 2025 annual meeting. The underlying premise is that those already holding the stock are passive in nature and will not sell. In some sense, the CPF SDS beneficiaries are passive in nature and create some "inelasticity" in Singtel's supply of shares. So when they finally own it directly, the previous inelasticity converts to elasticity. Of course, the quantum has been deemed as insignificant by those who have made this decision. Nonetheless, if these folks provide liquidity come Nov, I suspect SingTel is more than happy to do share buy back.

Surprise S$6,800 windfall for mom-and-pop investors, but Singtel is doing it for Singtel

For the median shareholder holding 1,360 SDS from the 1993 initial public offering, this policy change is a sudden, fully liquid S$6,800 bonus.

Singtel has more than 700,000 retail shareholders. But for 615,000 of them, the company is not legally allowed to speak to them directly. Because these shares were bought using CPF funds under a special 1993 scheme – back when most people did not have trading accounts – the CPF Board acts as the legal trustee.

Finally, there is the matter of market liquidity. Right now, about 4.4 per cent of Singtel’s total shares are essentially in a coma. They sit in CPF accounts, largely forgotten, generating dividends but doing absolutely nothing for the stock’s daily trading volume.

By putting these shares directly into the hands of retail investors and waiving the withdrawal rules, Singtel is injecting life back into this dormant float. Whether people hold them in their active CDP accounts or sell them on the open market, it creates more liquidity. Better liquidity is generally good for a stock’s overall health and pricing.

https://www.businesstimes.com.sg/opinion...it-singtel

[swakoo]

To be honest, I am not so sure if releasing these shares from CPF to CDP custody is a net positive for SingTel and minorities.

If have time, watch this blogger's interview with Singtel CFO on more details of history and transfer of SDS to CDP to assess if there are net positives for Singtel or minorities:

Singtel Special Discounted Shareholders $6800 Windfall! Group CFO Explains!

Nonetheless, if these folks provide liquidity come Nov, I suspect SingTel is more than happy to do share buy back.

No need to wait till Nov, SDS holders can already sell from today if they want to.

Side notes:
Singtel share buybacks (for cancellation) have been taking place for nearly a month now.
6 bagger for median SDS holder over the 30+ years translating into roughly 6% CAGR.

Finally, there is the matter of market liquidity. Right now, about 4.4 per cent of Singtel’s total shares are essentially in a coma. They sit in CPF accounts, largely forgotten, generating dividends but doing absolutely nothing for the stock’s daily trading volume.

By putting these shares directly into the hands of retail investors and waiving the withdrawal rules, Singtel is injecting life back into this dormant float. Whether people hold them in their active CDP accounts or sell them on the open market, it creates more liquidity. Better liquidity is generally good for a stock’s overall health and pricing.

Prior to this announcement, SDS was accounting for about 0.5% of daily volumes. Presumably it may go up from today onwards as holders become aware of ownership and ability to take proceeds in cash, but think will not move needle much for liquidity on daily basis.

[specuvestor]

Sorry just curious... prior to this announcement one could sell SDS shares after the special booths in banks were closed decades ago?

I always thought those who didn't sell was stuckist cause SDS was not CPFIS or CDP so brokers can't link to sell.

This is a good study on uncontemplated decision making without proper infrastructure like CPFIS established. Set up SDS was special case, now get out of CPF also special case. Govt can't transfer to CPFIS cause will involve the banks and I presume those without CDP account govt will sell for them and get cash. {edit: CDP will create another "special account"... CPF problem become CDP}

In any case most of these people are already past 55, so this special case is just bypassing Full Retirement Sum.

Prior to this announcement, SDS was accounting for about 0.5% of daily volumes. Presumably it may go up from today onwards as holders become aware of ownership and ability to take proceeds in cash, but think will not move needle much for liquidity on daily basis.

[swakoo]

Sorry just curious... prior to this announcement one could sell SDS shares after the special booths in banks were closed decades ago?

I always thought those who didn't sell was stuckist cause SDS was not CPFIS or CDP so brokers can't link to sell.

Can sell via:

1) Phillip Securities (Online): This was the primary digital route. Phillip Securities would open a temporary account for the holder specifically to execute the sale.

2) SingPost Branches (In-person): For those less tech-savvy, holders could go to designated SingPost branches to submit a manual sell instruction.

3) Selected SGX Retail Brokers: Some retail brokers (like DBS Vickers or UOB Kay Hian) could handle SDS sales, but the process involved more paperwork than a standard trade.

Same channels and process also moving forward. Just that sale proceeds now go into bank account except for #3 where SDS holders can choose for proceeds to go back into CPF account to enjoy risk free interest.

This is a good study on uncontemplated decision making without proper infrastructure like CPFIS established. Set up SDS was special case, now get out of CPF also special case. Govt can't transfer to CPFIS cause will involve the banks and I presume those without CDP account govt will sell for them and get cash. {edit: CDP will create another "special account"... CPF problem become CDP}

No social media back then to KPKB about policy makers. And then later the  ageing (>52yo now) SDS holders probably don't have the intensity to use social media to KPKB.

[weijian]

To be honest, I am not so sure if releasing these shares from CPF to CDP custody is a net positive for SingTel and minorities.

If have time, watch this blogger's interview with Singtel CFO on more details of history and transfer of SDS to CDP to assess if there are net positives for Singtel or minorities:

Singtel Special Discounted Shareholders $6800 Windfall! Group CFO Explains!

Nonetheless, if these folks provide liquidity come Nov, I suspect SingTel is more than happy to do share buy back.

No need to wait till Nov, SDS holders can already sell from today if they want to.

Side notes:
Singtel share buybacks (for cancellation) have been taking place for nearly a month now.
6 bagger for median SDS holder over the 30+ years translating into roughly 6% CAGR.

Finally, there is the matter of market liquidity. Right now, about 4.4 per cent of Singtel’s total shares are essentially in a coma. They sit in CPF accounts, largely forgotten, generating dividends but doing absolutely nothing for the stock’s daily trading volume.

By putting these shares directly into the hands of retail investors and waiving the withdrawal rules, Singtel is injecting life back into this dormant float. Whether people hold them in their active CDP accounts or sell them on the open market, it creates more liquidity. Better liquidity is generally good for a stock’s overall health and pricing.

Prior to this announcement, SDS was accounting for about 0.5% of daily volumes. Presumably it may go up from today onwards as holders become aware of ownership and ability to take proceeds in cash, but think will not move needle much for liquidity on daily basis.

hi swakoo,

Have to admit that I got called out for not reading the articles thoroughly and so, thanks for the correction. The November's date is actually for migration towards individual CDP account (for those who don't do anything)

As for the youtube link, let's just say that I am selective towards how I spend my time and SingTel isn't under my radar. Nonetheless, if I have to choose to improve my knowledge on SingTel, I would choose to spend it on reading SingTel's annual report instead. That's just me though and doesn't in any way discredit anyone's effort in content creation.

[specuvestor]

Interesting that CEO mentioned one of the reason is corporate action ie implying CPF is not going to / able to manage eg in specie distribution I guess

[swakoo]

Recall reading some analysts' chatter of future possibility of spinning off NCS or some of the data centers (possibly as a reit). Think the SDS structure would have complicated such corporate actions.

[swakoo]

I have to admit that as a CLI shareholder, there was some comic relief when I read my CEO Chee Koon's PR. It seems that he has copied well from other CEOs...

"value realisation" --> A Singtel word?

Hi weijian, for Singtel, consider this. It comprises of the following parts:

1) listed telco associates (in India/Africa, Thailand, Philippines) that can be valued at actual though dynamic market prices
2) listed non core associates (eg. Thai Gulf Development) that can be valued at actual though dynamic market prices
3) nonlisted telco associate Telkomsel (Indonesia) whose value can be imputed from listed parent (PT Telkom)
4) nonlisted core telco Optus (Australia) whose value can be imputed from pending sale of >30% stake (in advanced negotiations, with 7 weeks exclusive due diligence ongoing)

5) nonlisted core telco Singtel Sg
6) nonlisted growth engines NCS (digital services) and Digital InfraCo (AI-ready DCs)

Combined values of #1 to #4 alone comes close to Singtel's actual market capitalisation value, with values of course fluctuating based on daily market prices for listed entities. So in the extreme, if Singtel wants to and is able to liquidate #1 to #4 completely, it's shareholders would get all their money back and still be left with #5 and #6 as considerable bonus assets. Perhaps this is what Singtel management refers to as "value realisation"?

But instead of this extreme move, it has been selling small slices of #1 and #2 and is trying to do the same for #4. And distributing as dividends directly (VRD) or via share buybacks (VRSB). "Value realisation" on a smaller and more realistic scale? So perhaps there is some meaning to the "vocabulary soup". Bonus if it also provides comic relief. 

[weijian]

But instead of this extreme move, it has been selling small slices of #1 and #2 and is trying to do the same for #4. And distributing as dividends directly (VRD) or via share buybacks (VRSB). "Value realisation" on a smaller and more realistic scale? So perhaps there is some meaning to the "vocabulary soup". Bonus if it also provides comic relief. 

In the ordinary course of business, a company sells off some non-core businesses, unlocks some excess capital that is not re-invested and distribute them to shareholders via share buybacks or dividends. The dividend will generally be called a "special dividend". As for share buybacks (SBB), they will generally announce a "XXX mil SBB program"

But adding the words "value realisation" to describe both dividend and SBB is probably a first. And Singtel Mgt is really serious about it - When you look at share buybacks via SGX company announcements, Singtel uses the phase "Share Buy Back - Daily Share Buy-Back Notice::S$2Bn Value Realisation Share Buy-back Programme" while everyone largely conforms to the no-frills "Share Buy Back - Daily Share Buy-Back Notice:: Daily Share Buy Back" 

SGX company announcement: https://www.sgx.com/stock-exchange/compa...gesize=100

[swakoo]

In the ordinary course of business, a company sells off some non-core businesses, unlocks some excess capital that is not re-invested and distribute them to shareholders via share buybacks or dividends. The dividend will generally be called a "special dividend". As for share buybacks (SBB), they will generally announce a "XXX mil SBB program"

But adding the words "value realisation" to describe both dividend and SBB is probably a first. And Singtel Mgt is really serious about it - When you look at share buybacks via SGX company announcements, Singtel uses the phase "Share Buy Back - Daily Share Buy-Back Notice::S$2Bn Value Realisation Share Buy-back Programme" while everyone largely conforms to the no-frills "Share Buy Back - Daily Share Buy-Back Notice:: Daily Share Buy Back" 

Hi weijian,

The CFO specifically said it is not a "special" dividend, which has the connotation of being one off. Enough capital recycling has been done to provide "value realisation" dividends up to FY2030. Beyond which the growth engines are supposed to take over and provide the VRDs. (Or even if this is delayed, think they have enough scope to do more capital recycling until the growth engines kick in sufficiently.)

The share buybacks support this incremental dividend regime indirectly by reducing number of shares. Hence think that's why they scrupulously added "value realisation" to naming the share buybacks instead of leaving it just plain vanilla  or no frills share buybacks.

That is one consideration for the word smithing - not one off but transitional.

The other aspect to calling it value realisation is that there is a holding company discount to the assets held, as illustrated in earlier post. By selling parts of some at market prices, it is tantamount to "realising" the market "value" sans the discount.

So it appears this is not merely doing "word salad" as practised by some overseas politicians. Seems there is method to the  seemingly comical word smithing.