Singtel (Z74.SI) shares surged 3.21% in intraday trading, as investors reacted positively to a bullish outlook for Singapore's telecommunications sector. The stock's upward movement comes on the heels of a report from UOB Kay Hian analysts predicting decent first-quarter earnings growth for the industry.

According to the UOB Kay Hian report, the telecom sector's growth is expected to be driven by several factors, including strong earnings visibility, improving business outlooks, and ongoing cost-saving initiatives. The analysts noted that the sector is currently trading slightly below its five-year average forward ratio of enterprise value to earnings before interest, taxes, depreciation, and amortization, suggesting potential upside.

Notably, UOB Kay Hian maintains an overweight rating on the telecom sector and has singled out Singtel as its top pick. The brokerage's preference for telcos with regional exposure, such as Singtel, is partly attributed to the persistently weak domestic market in Singapore, which continues to face stiff pricing competition. This positioning could explain investors' enthusiasm for Singtel stock, as the company's diversified regional operations may provide a buffer against local market challenges.