No material catalysts either way for now. The stock has been tightly range-bound around S$2.50 levels since Oct-08. We think stock sustains relative outperformance in down markets but lags market rallies. Associates (59% of SOP) afford most leverage (within local telco peers) to market recovery though.

Entering ASX100 effective close of trade on March 20. Likely prompts higher interest from investors down under. SingTel is our preferred pick within the telco group down under comprising Telstra, SingTel and TCNZ.

Longer-term kickers emerging. Low FY09E base sets up (assoc.-driven) 10% EPS growth for FY10E – great in these markets, but modest on absolute basis. Wireless industry consolidation and (NBN-driven) value shifts from Telstra bode longer-term earnings upside at Optus; the NBN transition in Singapore could free up surplus cash – all longer-term options not in the price today.

Dividends – upside surprise unlikely. M&A (to boost growth) and NBN (larger for Australia than Singapore) are both funding uncertainties; we do not see SingTel going beyond normal dividends. We see 60% payout driving 5% annual yield (in line with STI yielding 6.7% but below local peers StarHub and M1).

Valuations – not too hot, not too cold. (1) 11.4x P/E; EV/EBITDA of 5.7x not cheap relative to Asian integrated telco peer group (9.4x, 4.4x); (2) Stub valuations (stripping out listed associates): trough valuations would imply S$2.15 on the stock currently; (3) Sum-of-parts at associate target prices at S$2.70; at spot associate prices at S$2.30.