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The new UK Prime Minister, Gordon Brown, has ordered a review of super casino. This is bad news for Genting International Public Ltd (GIL) as through its subsidiary Stanley Leisure, GIL is the leading contender for the super casino license. This is over and above the recent negative news that the UK government is to impose a surprise gaming tax. Incidentally the gaming tax was imposed by Gordon Brown in his role as the previous Chancellor of the Exchequer (Minister of Finance). We read Mr Brown?s 2 decisions on the casino to mean that he is not in favour of American style Integrated Resort. This could potentially be negative on GIL as we have ascribed about 75% option value for the UK super casino win, and that translates to a fair value estimate of S$0.86. We maintain our HOLD recommendation for now until there is greater clarity on the issue.
New UK PM orders reviews of super casino. The new UK Prime Minister, Gordon Brown, has ordered a review of super casino concept to determine whether it is the best way to regenerate towns and cities. A source close to the government was further quoted to say that ?the regional casino is pretty much dead in the water?. This is bad news for Genting International Public Ltd (GIL). Through its subsidiary Stanley Leisure, GIL is one of the largest gaming players in UK and is the leading contender for the super casino license which was expected to be located in Manchester.
Different priorities. The review is over and above the surprise gaming tax that was incidentally imposed by Mr Brown when he was the previous Chancellor of the Exchequer (Minister of Finance) in his last Budget Statement. Collectively Mr Brown?s 2 decisions on the casino can be read to mean that he is possibly not in favour of American style Integrated Resort. Furthermore, his priorities could be different from that of the previous PM Tony Blair.
Future funding likely debt or project financing. Recently GIL announced that it intends to raise S$2.0-S$2.3bn via a rights issue on the basis of 3 new shares for every 5 existing shares held. The pricing of the rights will be determined after an EGM to be held at a later date. GIL revealed that it intends to use the funds for the development of Sentosa Integrated Resort (IR), repayment of debt as well as for working capital. This cash call will be the third since GIL won the Sentosa IR and if the current rights issue is successful, GIL would have raised a total of S$3.18bn since January 2007. This means GIL would still need to raise a further S$2.0bn to finance its S$5.2b Sentosa project, but we expect the balance to be most likely to be debt financed.
Maintain HOLD. The key investment case for GIL remains its ability to win more concessions for integrated resorts. In light of the recent development, the UK super casino license appears to have been put on hold indefinitely. As for valuation, we have ascribed about 75% option value for the UK win, and that translates to a fair value estimate of S$0.86. We see limited upside from current trading range and we thus maintain our HOLD recommendation.
Agreed. I think any news on progress of IR will push this stock up...Lets' be realistic...GENTING IS ONE & ONLY CASINO STOCK... ASIANS LOVE TO GAMBLE...Genting is making and will make even more $$...It is only a matter of time b4 this gem CHEONG...
it moving, maybe some news coming.
look like bb is coming in, cheong liao. strong buy at 0.935.
I think the development charge should not affect Genting. It should only affect new dev projects (correct me if I'm wrong) . For Genting, It's the rts issue that's is causing havoc, just like pac andes. When the investors/punters/traders are irrational, no one can stop it. Say, how does this development charge affect C Yuanbang, a developer which has property development projects only in Guangzhou? It went down with the rest of property counters. To me, it's unjust.
Well lets hope so. I have been seeing the graph of this counter, its has been dropping. And also today it has drop its support value.
I think the increase in development charge by gov is only on the housing and not on IR project. capitaland, lian beng, allgreen, cdl etc will be affected and not genting and sand.
genting and csc may cheong today, the development of IR is progressing.
We have to think very carefully here.
If the rights is high (above $0.70), this would certainly bring the net asset value up, but would the investors want to to fork out the extra cash and gain only $0.20 should price remains as $0.90?
However, if the rights is low (below $0.20), there wil be some dilution of shares, but it becomes a attractive value buy.
When is Uncle Lim going to announce the rights issues? A lot of nerves on this counter...
to achieve the 0.90cents, the shre price have to shoot up today above 0.98 and above.
i think very very hard
I think the right would be somewhere above .90 cents.
target price, I think is 0.98 today.
casino business report in ST for macau is very good, time for genting to cheong. Lowest is 0.915 now 0.935. Cheong cheong and cheong.
Hi, Genting is currently trading at a net assest value of S$0.2459 per share. If the rights is S$0.70 per issue, the net asset value of Genting would go up. You can calculate the new net asset value per share based on the number of current shares and intended rights issue.
This would mean the pricing of the rights is important.
93cts support broken & close at 92.5 cts,think I will start to load up at 92 cts if tonight Dow is red & keep under the pillow for 1 year.Should be a base formed or else how to issue rights.Ah Lim & Co will support above 90 cts.
Forget about OCBC downgrade to 86 cts, I think they are the one who collect if it reach below 90 cts.No risk no gain, buy at your own desire & never to regret.Happy trading & investment.
Strait times July 14, says that New Prime minister Gordon Brown not in favour of Super casino.Sixteen new casinos currently on the drawing board are likely to go ahead but MR. Brown has decided to stop the construcion of a vast Las Vegas-style "Super Casino".Gordon Brown is a son of a Protestant preacher so very difficuilt for gambling in Britian for the future.
Lets say if Genting offer rights at 70cents,should we wait & subscribe it or sell it now & buy back later after the right offered?Hope to get some advice from your guys.
Any news about the 17 new casinos(8big,8 small,1 regional) which will start for bidding in the end of this year?Heard that Genting have a high chance to get few license base on Genting is the biggest casino operator in England.
Hi all, please correct me if i am wrong.
Based on current number of shares in the market (i.e. 5,441,255,000 shares), and the intent to issue 3 for 5 shares, the numbers of new shares issued will be around 3,264,753,000. It is reported that these new shares are to raise new funds between $2b to $2.3b.
Hence, am i correct to estimate the rights will be sold at around $0.70 per share?
