Singapore, Feb 5, 2026, 14:54 (SGT) — Regular session
- Singtel shares dropped up to 3.9% following a two-day rally linked to the STT GDC deal
- Investors are grappling with funding, capex commitments, and execution risks tied to the KKR-led buyout
- Following the announcement, analysts raised their target prices but maintained their “buy” ratings
Shares of Singapore Telecommunications Ltd (Singtel) dropped on Thursday, retreating after a two-day gain. Investors cashed in some profits following the confirmation of its data centre acquisition led by KKR. The stock dipped to S$4.72, down S$0.19 from Wednesday’s close, according to The Business Times. (The Business Times)
Investors are digesting one of Singapore’s largest deals in years as KKR and Singtel agreed to shell out S$6.6 billion (US$5.2 billion) in cash for the remaining 82% stake in ST Telemedia Global Data Centres (STT GDC) they don’t yet own. The deal values the company at an enterprise value of S$13.8 billion, debt included. Phillip Securities Research’s Paul Chew described the acquisition as a “funnel for growth” beyond 2028 and deemed the EV-to-EBITDA valuation “fair.” Maybank Securities Singapore’s Hussaini Saifee said Singtel has “a right to play” here, noting the combined entity’s scale positions it to capture larger hyperscaler and AI workloads. (Reuters)
Why this matters now: Singtel is trying to shed its image as a slow telecom and position itself as a digital-infrastructure player, just as global spending pivots to data centres built for heavy computing loads. The market likes the approach, but investors are waiting on the details — the cash outflows, debt levels, and potential returns if power expenses rise or construction drags on.
The stock closed at S$4.74, slipping 3.46% from its open of S$4.84. It fluctuated between S$4.86 and S$4.71, with roughly 21.85 million shares traded, per Investing.
Despite the stock’s dip, some brokers stayed bullish on the longer term. CGS International boosted its target price to S$5.34 from S$5.20, while HSBC nudged theirs up to S$5.20 from S$5.15, both maintaining “buy” calls, The Business Times reported. CGS analyst Prem Jearajasingam pointed to Singtel’s asset-recycling “war chest,” saying the deal shouldn’t hurt dividend growth. The acquisition will cost Singtel S$740 million, split into two tranches in 2026 and 2027, with an extra S$400 million to S$500 million earmarked for equity linked to capital expenditure commitments, the story said. (The Business Times)
Singtel’s group CFO, Arthur Lang, described the deal as a “significant step” to boost the company’s digital infrastructure growth. He highlighted STT GDC’s geographic presence as key to expanding the group’s reach, according to Channel News Asia. (CNA)
STT GDC, set up in 2014 and headquartered in Singapore, operates data centres throughout Asia-Pacific, Britain, and Europe. The company offers services including co-location, where clients lease space and power, as well as connectivity and support. For Singtel, this move strengthens its digital infrastructure efforts and deepens its link with KKR, a current backer of segments of the strategy.
The downside is clear. Regulatory hurdles might delay progress, and rising funding costs or bigger-than-expected build expenses could tighten returns in a cash-intensive business that frontloads spending and recoups it over years. A slowdown in AI-driven demand or limited power supply in crucial markets would only add pressure.
Investors are now zeroing in on potential insights into approvals, debt conditions, and capex timing as the deal targets a close in H2 2026. Singtel’s upcoming earnings report will be the immediate focus, with Investing.com’s calendar marking Feb. 18 as the next update. (Investing)
