NETLINK NBN Trust, which made its debut on the Singapore Exchange on Wednesday, opened flat at its inital public offering (IPO) price of S$0.81 and closed at $0.805 on Thursday.

Over 184 million shares worth S$149 million were traded on Wednesday after the opening bell at 3 pm.

The closing price of S$0.81 on the 1st day of IPO disappointed some investors which thought they might make a windfall of at least 5 to 9 cents (e.g. 0.86 ~ 0.90) upon opening.

From the looks of it, NETLINK Trust would have an uphill task as it’s business is about fibre network. So far, most of the household are already wired up during the initial phases of deployment.

In addition, telcos like M1, Starhub, MyRepublic uses their services which forms part of a recurring income for Netlink Trust. As NetLink Trust seemed to be concentrate in Singapore and may be restricted in bidding for fibre projects overseas, the growth is also capped.

We feel that telcos might require fibre as backhaul networks in future to support the 5G and IoT. Income would also come from fibre up of non residential (but they can be deployed using high speed 4G/5G and cheaper).

So, for the time being, the share price should be stable and great for dividend play. In the mid term, the share price might drop as most Trusts do.

By Harry