Bharti has ended its merger talks with MTN as no

consensus could be reached on the structure of the

deal. DBS Research expects SingTel’s share price to

benefit from this news in the near term due to two

key reasons (1) Bharti’s stock price has fallen by close

to 10 per cent from its peak in the last one month on

possible overpayment concerns. As Bharti constitutes

33% of our SOTP valuation for SingTel, if Bharti stages

5-10% recovery, SingTel can register 2-3% recovery.

(2) SingTel had omitted special dividends with its FY08

results (we had expected 8 cents) possibly to reserve

cash for MTN deal. With no cash outlay required for

the MTN deal now, investors can hope SingTel to

announce special dividends in FY09, given its net debt