KUALA LUMPUR (Sept 24): Genting Bhd's share price fell as much as four sen or 0.67% so far today on profit taking after rising on news its 52.7%-owned subsidiary Genting Singapore Ltd is among a narrowed list of three potential bidders for the planned development of an integrated casino resort in the Japanese city of Osaka.
At Bursa Malaysia, Genting shares fell to their lowest so far today at RM5.90 on profit taking and amid broader market weakness after rising to their highest at RM5.98.
At 11:54am, FBM KLCI component Genting was traded at RM5.92 with 1.52 million shares changing hands. At the broader market, the KLCI fell 3.51 points to 1,589.42 at 12:08pm.
Yesterday, Genting shares closed up 14 sen or 2.41% at RM5.94 after news reports indicated that Genting Singapore, MGM Resorts International and Galaxy Entertainment Group had submitted request for concept proposals for the development of the resort, with a dedicated casino space.
Today, Public Investment Bank Bhd analyst Eltricia Foong wrote in a note the news is not a surprise as Public Investment was expecting the formal bidding process for Japan's integrated resort (IR) to commence in the second half of 2019.
"Earlier, we had highlighted the possibility of Genting Singapore securing one of the three IR licences in Japan due to its track record in operating and developing successful IRs in Singapore and Malaysia," Foong said.
She said Public Investment reiterated its outperform call on Genting shares with an unchanged target price (TP) of RM8.60.
"Genting's share price has been falling in recent months and we attribute this to the overall weakness in market sentiment as well as investors' uneasiness over the controversial related party transaction undertaken by Genting Malaysia Bhd.
"Also, we believe market may be wary of potential unfavourable measures to be announced in the upcoming Budget. Following the casino duties hike announced in the previous budget, we are not expecting further hike this year. Trading at an undemanding forward PER (price-earnings ratio) of 12x, we reiterate our Outperform rating on Genting with an unchanged TP of RM8.60," Foong said.
Genting owns a 47.08% stake in Genting Malaysia.