Genting Singapore sees shares fall more than 9%
Gaming company Genting Singapore saw its shares fall more than 9 per cent at the close of the local bourse yesterday, amid news of a $4.5 billion investment plan for Resorts World Sentosa (RWS) and a 50 per cent increase in casino entry levies for Singaporeans and permanent residents.
The counter was the most heavily traded yesterday, with more than 239 million shares changing hands. It closed at $0.97, down 10 cents and 9.35 per cent. Bloomberg said this is the most the stock has slumped in almost four years and that at least six brokerages, including Morgan Stanley and J.P. Morgan, have lowered ratings on the casino operator.
Genting and Las Vegas Sands Corp have committed to spend about $9 billion on expanding their Singapore resorts, the Government said on Wednesday, adding that it would increase the casino entry levies for citizens and permanent residents from yesterday. The levy for Singaporeans and PRs is up from $100 to $150 and the annual levy from $2,000 to $3,000.
The Government, which agreed to extend the exclusivity period for the two casinos to end-2030, will raise tax rates on gross gaming revenue from February 2022 through a tiered structure.
"Higher investment cost, levies to be introduced on 4 April and gaming taxes from CY22F onwards are near-term downers,"CGS-CIMB analyst Cezzane See said in a note.
While Genting's investment plan has long-term benefits, it would "likely reset its (the firm's) earnings growth and cash pile," Ms See said.
The expansions include the construction of a fourth tower at the Marina Bay Sands hotel owned by Las Vegas Sands, while Genting will add a Minion Park and Super Nintendo World among its new attractions.
OCBC Investment Research maintained a "buy" rating for the mainboard-listed company, pointing to the earnings certainty in the long term.
Analyst Carmen Lee said: "When fully developed, its (RWS) facilities will be able to capture more meetings, incentives, conferences and exhibitions (MICE) attendees and more tourists to its expanded hotels and tourist attractions." - THE STRAITS TIMES, REUTERS
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