Genting endures volatility amid selldown, licence issue

INVESTORS in Genting International had not only the market plunge to contend with but also news that the gaming operator's ability to obtain a casino licence is under question.

The Home Affairs Ministry said on Tuesday that the Genting-Star Cruises consortium's gaming licence was not an automatic right that goes with the building of the Sentosa resort.

The ministry has told Genting and Star Cruises that it will conduct 'suitability checks' before the licence is issued.

The ministry's statement comes as a signal to Genting that the Singapore Government will scrutinise its ties with Macau casino billionaire Stanley Ho, who is rumoured to have links to Macau triads.

Not surprisingly, the counter took a beating on Wednesday, tumbling by 6.5 cents, or around 8 per cent, to close at 75.5 cents, on 120.3 million shares traded.

Following the revelation of the ministry's statement, some gaming analysts in Malaysia, according to The Business Times, remained bullish, saying that Genting will get a casino licence in Singapore.

Genting also issued a statement on Wednesday saying it was 'fully committed' to making the resort a success and to meeting the 'suitability requirements' for a casino licence.

This cheered investors, who bought back into the stock, pushing it up by more than 2 per cent to 77.5 cents on Thursday.

Market watchers say it would be difficult to assess the 'true impact' the casino licence news had on Genting shares because the broader market was being sold down dramatically.

'At its low on Wednesday, the index fell by 192 points, so in essence, every stock, good or bad, was probably being cast away,' said a remisier.

He also noted that the malfunction in the trading system late in the day could also have affected Genting trades.

Last Friday, Genting announced a 48 per cent fall in its full-year net profit to $56.9 million, on the back of investment losses and higher interest expenses.

However, revenue shot up from $80.98 million to $292.9 million, thanks mainly to its British casino operations.

After the results, OCBC Investment Research issued a report saying the investment case for Genting is the 'potential penetration' into new markets.

'In that respect, we see it as a strong contender for the British super casino licence and have allowed for a 75 per cent probability of winning this in our valuation,' it said.

It added that for the Macau project, there is a possibility of Genting withdrawing, and so it has not allowed for this project in its valuation.

OCBC has downgraded the shares from a 'buy' to a 'hold' as it thinks the stock does not have much more room to rise.

'We will reassess its valuation when its potential to acquire other gaming licences (other than the British one) is made known,' OCBC said.

However, CIMB-GK appears to be more bullish, keeping an 'overweight' rating on the stock.

It said Genting's statement should ease concern over the casino project and help restore investor confidence.

Investors seem to agree. Thestock rose 5.5 cents to 83 cents yesterday and was the most active counter, with 142.2 million shares changing hands.

gabrielc@sph.com.sg

News Today

North Korea 'ready to implement agreement'
NORTH Korea is ready to implement an agreement reached earlier this week on initial steps towards denuclearisation, a news report yesterday quoted the North's top nuclear negotiator as saying.'The talks went well,' Kyodo news agency quoted the North's Vice- Foreign Minister... [Read more]

Catch fine arts on last day of Nafa open house
TODAY is the last day of the Nanyang Academy of Fine Arts (Nafa) three-day open house. The highlight is a fashion show to be staged by Nafa students who won two major design contests held in conjunction with Singapore Fashion Week... [Read more]

'You better hang me'
THE accused gunman dubbed the 'One-Eyed Dragon' created a stir in court yesterday when he urged the High Court judge presiding over his trial to hang him, saying it would ensure his wife's safety. Just before yesterday's hearing broke for lunch,... [Read more]

Company director cannot rely solely on advice: Ruling
A RECENT court ruling has hammered home the point to directors that they cannot abdicate their duties by claiming they have relied on professional help, legal observers say. The case of Gaelic Inns - which runs Muddy Murphy's Irish Pub and... [Read more]

New SAF facility for bio-chem training
A SINGAPORE Armed Forces (SAF) training facility that can simulate threats presented by deadly chemical, biological, radioactive and explosive agents was unveiled yesterday. Housed in a drab, four-storey building at Seletar Camp, the facility is part of the SAF's Chemical, Biological,... [Read more]

MFA 'disappointed' at remarks
SINGAPORE'S Foreign Ministry yesterday said it was 'disappointed' at an Indonesian official's remarks last week that the ban on sand exports was meant to pressure Singapore on the extradition treaty.The remarks by Mr Primo Alui Joelianto, the Director-General (East Asia, the... [Read more]

SIA, SilkAir cut fuel surcharges
PASSENGERS on all Singapore Airlines and SilkAir flights will pay less from today as the airlines cut fuel surcharges for the second time in four months.This follows a fall in jet fuel prices in recent weeks: A barrel now costs about... [Read more]

Estates run by PAP to be barrier-free by 2011
WITH the greying population and people with special needs in mind, public estates under the 14 People's Action Party town councils are being retrofitted with facilities like ramps and railings.By 2011, even wheelchair-bound residents in more than 8,200 housing blocks islandwide... [Read more]

Bush to intervene to boost Doha trade talks
WASHINGTON - US PRESIDENT George W. Bush is expected to intervene today in a bid to ensure the resurrected Doha Round of world trade talks succeeds.In a speech on the economy, Mr Bush will urge Congress to extend its deadline on... [Read more]

Els betters Woods
BRITAIN'S Graeme McDowell and Ross Fisher upstaged the elite of world golf yesterday.They shared the lead on seven-under-par 65, after the first round of the Dubai Desert Classic. They eclipsed three-time champion Ernie Els, who fired a 66 earlier in the... [Read more]

Youth crime down 30% last year
THERE has been a drop in youth crime - about 30 per cent from 2005 to last year. Youths still account for one in five people caught last year. Aged seven to 19, they comprise about 15 per cent of the... [Read more]

Singapore Virgina

SMEs should make full use of Budget perks: Chamber chief
LOCAL firms should take full advantage of the perks offered to them in the latest Budget, said the president of the Singapore Chinese Chamber of Commerce and Industry (SCCCI) on Sunday. Mr Chua Thian Poh urged local businesses, particularly small and... [Read more]

$15b in Iraq reconstruction funds wasted by US
WASHINGTON - ABOUT US$10 billion (S$15.3 billion) has been squandered by the US government on Iraq reconstruction aid because of overcharges and unsupported expenses, and federal investigators say more money is at risk. The three top auditors overseeing work in Iraq... [Read more]

A study of chinese temples
A book recording the history and development of 40 temples in Singapore was released yesterday. Chinese Temple and Culture Volume 2, produced by Shin Min Daily News, also features articles by 10 local experts on Chinese customs. It was launched by... [Read more]

Russian concerns behind the handshakes in India
RUSSIAN President Vladimir Putin was received with great warmth in New Delhi this week. And he signed a raft of new military agreements for hundreds of tanks, as well as new jets. India plans to spend S$15 billion on new defence... [Read more]

Repair delayed due to rare fault in plasma TV set
WE REFER Mr Li Jianming's letter, 'Philips' after-sales service a big letdown' (ST, Feb 15). We would like to clarify that the fault detected on Mr Li's plasma TV is indeed a very rare intermittent fault and hence a longer period... [Read more]

Duo jailed, caned for fatal bashing at Marina South bar
TWO men who attacked another - who later died - at a Marina South bar last April have been handed jail terms and six strokes of the cane each. The victim, Mr Mohamed Salleh Tukiman, 38, was brutally beaten up at... [Read more]

Shooting sprees in two US cities leave 10 dead
SALT LAKE CITY (UTAH) - AT LEAST 10 people died and several others were injured when two gunmen went on separate shooting sprees in two US cities. Witnesses in a crowded Salt Lake City shopping mall in Utah reported hearing 'shot... [Read more]

Rules eased to get more foreign docs here
THE door has been opened wider to foreign doctors, as Singapore moves towards a new goal of having one doctor per patient in public hospitals.The public sector currently employs 3,156 doctors, which translates to one doctor for every two patients at... [Read more]

Local index falls as trading slows ahead of long weekend
WHEN traders have the prospect of a long weekend in front of them, not even a pro-business Budget can keep them on the job. Skipping out early was the game plan yesterday and the market showed the indifference with volume dipping... [Read more]

eSys lays off staff ahead of Teledata merger
POSTER boy entrepreneur Vikas Goel's eSys Technologies has laid off nearly one-sixth of its Singapore workforce, just before a merger with Chennai-based Teledata Informatics. eSys, one of the world's largest distributors of hard disks, said yesterday it has whittled down the... [Read more]

Companies in brief
COURTS SOUNDS PROFIT WARNING DUE TO THAI LOSSESTHE furniture and electronics retailer Courts (Singapore) issued a profit warning yesterday, flagging losses incurred by its operations in Thailand.The group said it expects to be in the red for the third quarter ended... [Read more]