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Singapore Telecommunications Ltd (CHESS) to leave the ASX: What shareholders need to know

Optus
Credit: Alan Levine

Giant telco, Singapore Telecommunications Ltd (CHESS) (ASX: SGT) has announced that it is delisting from the ASX, but keeping its primary Singapore Stock Exchange (SGX) listing.

Singtel, as the company is known, owns Optus, Australia’s number 2 telco. The company says that low volumes, liquidity and market demand indicate that institutional investors prefer to trade the company’s shares on its home exchange rather than the Chess Depositary Interest (CDIs) on the ASX, and it has little reason to keep its ASX listing.

During the twelve months to 31 March 2015, the number of Singtel CDIs traded on the ASX accounted for only 6% of all Singtel shares traded,” the company said. Singtel added that the number of CDIs on issue had declined significantly, and only represented around 137 million of the 16 billion Singtel shares issued.

Singtel’s weighting in the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) has shrunk to just 0.03% as well on the back of that.

Shareholders have a number of options they can pursue, including converting their CDIs into Singtel shares listed on the SGX on a 1:1 basis, or, sell their interests in Singtel shares on the SGX through Singtel-arranged sale facilities.

The company’s ASX-listed CDIs will be suspended from close of trading on 29 May 2015, with no trading after this date. Singtel says it will have no impact on Optus operations in Australia, or its business strategy in Australia and remains committed to growing and investing in its Australian business. But it does raise a tiny suspicion that Singtel may be looking to exit Australia to focus on Asia.

What it will also do is remove another telco from the ASX, following the merger between Vocus Communications (ASX: VOC) and Amcom Communications Ltd (ASX: AMM), and the takeover of iiNet Limited (ASX: IIN) by TPG Telecom Limited (ASX: TPM).

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Motley Fool contributor Mike King owns shares of Amcom Telecommunications Ltd., TPG Telecom Limited, and Vocus Communications Limited. You can follow Mike on Twitter @TMFKinga.

The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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