Singapore Telecommunications (Singtel) shares fell sharply during intraday trading, dropping 3.05% as investors reacted to news about the company's participation in a major data centre acquisition.
The decline followed Singtel's announcement that it is joining a KKR-led consortium to acquire full control of ST Telemedia Global Data Centres, with Singtel taking a 25% stake in what is described as the largest data centre transaction in Southeast Asia to date. However, market concerns have emerged regarding the deal's financial opacity and Singtel's future earnings trajectory.
Analysts have raised questions about the valuation methodology, noting that the enterprise value of approximately $11 billion includes "capital expenditure for committed projects" - a metric that is notoriously difficult to assess externally. Furthermore, analysts currently expect Singtel's earnings to decline by an average of 15.3% per year over the next three years, potentially affecting how the market views this expansion into digital infrastructure.