Shares of Singapore Telecommunications (SingTel) dropped to a three-month low after majority stakeholder Temasek Holdings said it was paring down its stake.
On Wednesday, Reuters reported that the telco's stock price dropped to a three-month low after news broke of Temasek's plan to sell 400 million shares, opening at S$3.16 (US$2.56) per share.
In a Singapore Exchange filing Wednesday, the investment firm said: "As an active investor for the long term, we rebalance our portfolio from time to time. We continue to be a significant shareholder in SingTel, which remains the largest company in our portfolio."
Reuters said the state investor is selling SingTel shares at S$3.20 (US$2.60) and S$3.25 (US$2.65) which amounts to about S$1.3 billion (US$1.06 billion).
Even after the sale, Temasek will remain as SingTel's largest stakeholder, with its stake dropping from 54.48 percent to 51.97 percent, noted the newswire.
Commenting on the drop in SingTel share, Carey Wong, analyst at OCBC Investment Research in Singapore, told Bloomberg that the market has overreacted a bit. "SingTel's earnings, while not fantastic, continue to remain stable," Wong said.
SIAS Research lead analyst Ng Kian Teck, told ZDNet the drop in price has made it slightly more attractive for investors. "A yield of 5 percent on a big cap stock like SingTel does make it looks attractive, it's paying stable dividends now and its profits have been rather stable," he noted.