Genting expects to clinch S’pore licence
By Yvonne Tan
GENTING Bhd is looking at a busy 2006 as it expects to clinch one of the two Singapore casino licences to operate in Marina Bay and Sentosa Island.
The de-regulation in Britain's gaming sector and return on capital re-rating from the expansion of its non-gaming assets, specifically energy, also augur well for the group.
The success of Genting International Ltd’s (GIL) earlier initial public offering (IPO) puts Genting in a “commanding” position to win one of the Singapore’s integrated resort (IR) licences, ECM Libra said in a report.
It said the offering of 800 million shares was oversubscribed by 8.1 times while demand in the retail portion was at 13.8 times. According to ECM, with the IPO exercise, GIL would have increased its free float from 8% to 23% - more than one billion of GIL’s 5.4 billion shares.
“With such a large number of shares in the market, it is quite foreseeable that GIL will be actively traded on the Singapore Stock Exchange and ultimately have a strong retail following despite most of the IPO initially allocated to institutional funds,” said ECM.
It said this implied that the Singapore public could end up being the strategic local investor in Genting’s IR bid. The research house said by using GIL for the IR bid, Genting was well ahead in the game - in terms of capital raising.
Should Genting not get anything out of Singapore, ECM said there was always the other pillar of gaming liberalisation - Britain's casino de-regulation.
Besides gaming, Genting has value in energy as well.
The company still has interest in the Muturi Block of BP’s Tangguh gas field off Indonesia. Although it sold 9.66 % effective rights in the gas reserves to BP in 2001, to reclaim most of its investment,
Genting would still be able to take 30% of it original rights to pre-tax profits of liquefied natural gas (LNG) sales when production begins in 2008, said ECM.
It said although it expects Genting’s share of the initial profits from the Tangguh LNG to be minimal in the first few years, the long-term value of still having 30% of its original rights cannot be ignored.
Shares in Genting ended yesterday as one of the top gainers, adding 40 sen or 1.9% to RM21.50.
According to an analyst, sentiment on the stock was boosted following reports that James Packer’s Publishing and Broadcasting Ltd and Stanley Ho have withdrawn their joint bid for the Marina Bay IR-cum-casino, raising Genting’s chances of securing the bid.
However, a local research house said despite this, it believed Genting’s prospects lay with the Sentosa Island IR, not the Marina Bay IR as the former fitted in with Genting’s track record and experience.
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By Yvonne Tan
GENTING Bhd is looking at a busy 2006 as it expects to clinch one of the two Singapore casino licences to operate in Marina Bay and Sentosa Island.
The de-regulation in Britain's gaming sector and return on capital re-rating from the expansion of its non-gaming assets, specifically energy, also augur well for the group.
The success of Genting International Ltd’s (GIL) earlier initial public offering (IPO) puts Genting in a “commanding” position to win one of the Singapore’s integrated resort (IR) licences, ECM Libra said in a report.
It said the offering of 800 million shares was oversubscribed by 8.1 times while demand in the retail portion was at 13.8 times. According to ECM, with the IPO exercise, GIL would have increased its free float from 8% to 23% - more than one billion of GIL’s 5.4 billion shares.
“With such a large number of shares in the market, it is quite foreseeable that GIL will be actively traded on the Singapore Stock Exchange and ultimately have a strong retail following despite most of the IPO initially allocated to institutional funds,” said ECM.
It said this implied that the Singapore public could end up being the strategic local investor in Genting’s IR bid. The research house said by using GIL for the IR bid, Genting was well ahead in the game - in terms of capital raising.
Should Genting not get anything out of Singapore, ECM said there was always the other pillar of gaming liberalisation - Britain's casino de-regulation.
Besides gaming, Genting has value in energy as well.
The company still has interest in the Muturi Block of BP’s Tangguh gas field off Indonesia. Although it sold 9.66 % effective rights in the gas reserves to BP in 2001, to reclaim most of its investment,
Genting would still be able to take 30% of it original rights to pre-tax profits of liquefied natural gas (LNG) sales when production begins in 2008, said ECM.
It said although it expects Genting’s share of the initial profits from the Tangguh LNG to be minimal in the first few years, the long-term value of still having 30% of its original rights cannot be ignored.
Shares in Genting ended yesterday as one of the top gainers, adding 40 sen or 1.9% to RM21.50.
According to an analyst, sentiment on the stock was boosted following reports that James Packer’s Publishing and Broadcasting Ltd and Stanley Ho have withdrawn their joint bid for the Marina Bay IR-cum-casino, raising Genting’s chances of securing the bid.
However, a local research house said despite this, it believed Genting’s prospects lay with the Sentosa Island IR, not the Marina Bay IR as the former fitted in with Genting’s track record and experience.
Link
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