Monday, February 23, 2009

Genting Berhad. Drops Most In A Month.

GENTING Bhd dropped the most in a month in Kuala Lumpur trading after its overseas unit, which is building a casino and theme park in Singapore, said the opening costs have increased and will erode earnings this year.

Shares of Genting, Asia’s biggest listed casino operator, slid 1.1 per cent to RM3.58 at close, the steepest decline since January 20. Genting International Plc said yesterday the opening costs for the so-called integrated resort will have a “significant” impact on its earnings this year. It will increase its investment in the resort to S$6.6 billion (US$4.3 billion) from S$6 billion, the company said.

The company now expects a lower internal rate of return of 13-14 per cent from the Singapore project compared with 15 per cent previously, because of the global recession, Maybank Investment Bank Bhd said in a report today. Maybank Investment lowered its target price on Malaysia’s Genting to RM4.30 from RM4.80.

Genting International said yesterday the Singapore casino is “on track” to open by early 2010 and more than S$4.5 billion in construction contracts have been given out for the resort, which will include Southeast Asia’s first Universal Studios. Singapore's tourism chief said yesterday that the island republic won’t change its casino regulations even as it pledges to “help” Genting International Plc and Las Vegas Sands Corp ensure the opening of their gaming resorts in the city-state.

Singapore isn’t considering relaxing rules imposed to curb problem gambling, including a S$100 ($65) a day levy on citizens and permanent residents entering the casinos, even as the global slowdown reduces visitor numbers to the country, said Aw Kah Peng, chief executive officer at the Singapore Tourism Board.

“Just as they have taken a long-term business decision, and we have also designed some of these regulations with a long-term view, I don’t think it is about changing it arbitrarily,” Aw said in an interview yesterday. “We are working very hard and they are working very hard, we will make sure we help as much as we can to make sure they open.” - Bloomberg

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