GOLDMAN Sachs has upgraded Singapore Telecommunications to a 'neutral' rating from 'sell', citing the recent selling in the firm's shares and on hopes its Singapore and Australian businesses will remain stable.

'We believe that the market has discounted the currency risk associated with its regional portfolio of investments,' Goldman analysts said in a note.

'We also believe that the Singapore and Australian business outlooks are stable from here while the recent disappointing earnings from (Indonesia's) Telkomsel are likely to take a turn for the better going into 2009.'

Goldman Sachs' 12-month price target is S$2.53. Shares of SingTel last closed at S$2.40.