Genting Malaysia hits limit down after Guan Eng announced higher casino tax

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KUALA LUMPUR (Nov 5): Genting Malaysia Bhd shares hit limit down today after the stock fell as much as RM1.36 or 30% to RM3.18. The stock fell today after Finance Minister Lim Guan Eng said during Malaysia's Budget 2019 tabling on Friday the country will raise the annual casino licence fee from RM120 million to RM150 million.

Lim also said casino tax will be increased to 35% of gross income. At Bursa Malaysia today, FBM KLCI-linked Genting Malaysia shares were traded at RM3.38 at 9:44am with some 170 million shares crossed.

Genting Malaysia, which was the bourse's top decliner, was also the most-active stock.

Today, CIMB Research analyst Nigel Foo wrote in a note: "Genting Malaysia's casino operations were hit with a 10% hike in casino duties in Budget 2019, the first rate hike in 20 years. Duties are 35% now."

"This was a negative surprise as we had expected a smaller casino duty rate hike. The rate was previously around 25%. The stock remains a Hold. We cut TP (target price) from RM5.25 to RM4.85," Foo said.