| Genting Bhd | ||||||
| Year | DPS | EPS | Retained EPS | |||
| 2002 | 2.8 | 20.7 | 17.9 | |||
| 2003 | 3 | 20.3 | 17.3 | |||
| 2004 | 3.2 | 26.3 | 23.1 | |||
| 2005 | 3.7 | 28.3 | 24.6 | |||
| 2006 | 4.5 | 36.1 | 31.6 | |||
| 2007 | 26.8 | 43.1 | 16.3 | |||
| 2008 | 5.4 | 46 | 40.6 | |||
| 2009 | 5.3 | 31.5 | 26.2 | |||
| 2010 | 5.6 | 80.5 | 74.9 | |||
| 2011 | 6 | 63.7 | P | 57.7 | ||
| Total | 66.3 | 396.5 | 330.2 | |||
| 2002-2011 | ||||||
| EPS increase (sen) | 43.0 | |||||
| DPO | 17% | |||||
| Return on retained earnings | 13% | |||||
| (Figures are in sens) | ||||||
Showing posts with label Genting Singapore. Show all posts
Showing posts with label Genting Singapore. Show all posts
Thursday, 30 August 2012
Genting Bhd - Return on Retained Earnings
Monday, 15 November 2010
Genting S'pore net profit down but long-term prospects good
Saturday November 13, 2010
Genting S'pore net profit down but long-term prospects good
By FINTAN NG
fintan@thestar.com.my
PETALING JAYA: Genting Singapore Plc's prospects, like the city-state's gaming industry in general, are still good in the medium to long term, despite the over 52% plunge in the company's net profit to S$187.8mil for the third quarter ended Sept 30 compared with the preceding quarter.
The company's share price dived following the release of the quarterly results on Wednesday with the shares closing down 15 cents to S$2.13 yesterday.
Genting Singapore, a subsidiary of Genting Bhd, operates Resorts World Sentosa, one of two integrated resorts in the city-state, the other being the Marina Bay Sands operated by Sheldon Adelson's Las Vegas Sands Corp.
The company's share price, which has been steadily rising since the beginning of the year, was at its highest ever on Nov 9, when it closed at S$2.35.
The share price and valuation, according to a market sceptic, did not seem to reflect the short-term challenges ahead.
The company has an enterprise value/earnings before interest, taxes, depreciation and amortisation (EV/Ebitda) of 19.42 times and a price-to-earnings ratio of over 32 times.
The short-term challenges, according to analysts, essentially revolved around when junket operations could commence legally and when the industry could reach a level of maturity when growth, like Macau, would be exponential.
These challenges, however, would mean that parent company Genting would miss out on better contributions from the Singaporean operations although several analysts felt that there could be earnings surprises down the road.
"The company's Resorts World Sentosa is only in the first year of operations, so there is definitely more room for growth," an analyst with a local investment bank told StarBizWeek.
She said although the share price might have run a little ahead of valuation, long term the prospects were still good.
HwangDBS Vickers Research Sdn Bhd analyst Yee Mei Hui said even if EV/Ebitda was on the high side, there was a premium based on the fact that the Singaporean market was a duopoly.
"It is also quite clear regulations-wise over the next 10 years, so there's lower risk and the market has yet to see its full potential as in Macao," she added.
Besides which, Yee said, junkets could start as early as the beginning of 2011.
http://biz.thestar.com.my/news/story.asp?file=/2010/11/13/business/7418599&sec=business
Genting S'pore net profit down but long-term prospects good
By FINTAN NG
fintan@thestar.com.my
PETALING JAYA: Genting Singapore Plc's prospects, like the city-state's gaming industry in general, are still good in the medium to long term, despite the over 52% plunge in the company's net profit to S$187.8mil for the third quarter ended Sept 30 compared with the preceding quarter.
The company's share price dived following the release of the quarterly results on Wednesday with the shares closing down 15 cents to S$2.13 yesterday.
Genting Singapore, a subsidiary of Genting Bhd, operates Resorts World Sentosa, one of two integrated resorts in the city-state, the other being the Marina Bay Sands operated by Sheldon Adelson's Las Vegas Sands Corp.
The company's share price, which has been steadily rising since the beginning of the year, was at its highest ever on Nov 9, when it closed at S$2.35.
The share price and valuation, according to a market sceptic, did not seem to reflect the short-term challenges ahead.
The company has an enterprise value/earnings before interest, taxes, depreciation and amortisation (EV/Ebitda) of 19.42 times and a price-to-earnings ratio of over 32 times.
The short-term challenges, according to analysts, essentially revolved around when junket operations could commence legally and when the industry could reach a level of maturity when growth, like Macau, would be exponential.
These challenges, however, would mean that parent company Genting would miss out on better contributions from the Singaporean operations although several analysts felt that there could be earnings surprises down the road.
"The company's Resorts World Sentosa is only in the first year of operations, so there is definitely more room for growth," an analyst with a local investment bank told StarBizWeek.
She said although the share price might have run a little ahead of valuation, long term the prospects were still good.
HwangDBS Vickers Research Sdn Bhd analyst Yee Mei Hui said even if EV/Ebitda was on the high side, there was a premium based on the fact that the Singaporean market was a duopoly.
"It is also quite clear regulations-wise over the next 10 years, so there's lower risk and the market has yet to see its full potential as in Macao," she added.
Besides which, Yee said, junkets could start as early as the beginning of 2011.
http://biz.thestar.com.my/news/story.asp?file=/2010/11/13/business/7418599&sec=business
Monday, 30 August 2010
Genting posts record 2Q profit, thanks to S’pore
Genting posts record 2Q profit, thanks to S’pore
Written by Max Koh
Friday, 27 August 2010 13:59
KUALA LUMPUR: Lady Luck is smiling on Genting Bhd.
The group posted its highest quarterly pre-tax profit ever of RM1.59 billion for the second quarter ended June 30, 2010 (2QFY10), up 179% from RM570.45 million a year earlier, boosted by the newly opened Singapore operations.
Its net profit jumped 244.6% to RM739.17 million for the quarter, from RM214.49 million a year earlier. Revenue doubled to RM4.09 billion from RM2.1 billion, while earnings per share improved to 20 sen from 5.8 sen. It also declared a dividend of 3.3 sen per share for 1H10.
Within the leisure and hospitality division, its Singapore operations contributed RM2.03 billion in revenue, compared with RM1.2 billion from Malaysia, and RM250 million from UK and others. Another RM607.6 million in revenue came from its power, plantation, property and investment divisions.
“The improved revenue from Resorts World Genting is mainly due to better luck factor in the premium players business. The UK casino business in 2QFY10 also benefited from an increase in business volume. However, the weaker pound translated to lower casino revenue in ringgit terms,” it said in a filing with Bursa Malaysia.
The group’s plantation arm, Genting Plantations Bhd, also saw higher revenue and profit due to higher palm products prices and increased fresh fruit bunch (FFB) production.
However, the group’s power division, Genting Energy Ltd, recorded lower revenue due to lower generation of electricity by the Meizhou Wan power plant in China.
“The oil & gas division also posted lower revenue and profit, as a result of lower share of entitlement in China despite higher average oil prices achieved, as well as higher expenses incurred. The share of results in jointly controlled entities and associates increased in 2Q10, as the results in 2Q09 was impacted by the share of loss in a jointly controlled entity in Genting Singapore Plc arising from lower property valuation of a property in London,” Genting said.
The period also saw a net impairment loss of RM1.3 billion and net dilution gain of RM436.3 million, which arose from the company’s shareholding in Genting Singapore, when the remaining S$450 million convertible bonds were fully converted into new ordinary shares of Genting Singapore in 1H10.
“The net fair value gain on derivative financial instruments of RM67.9 million was mainly in respect of Genting Singapore’s fair value gain on derivative financial instruments from the valuation of the conversion option embedded in the convertible bonds,” it said.
For the rest of the year, the group said it was cautiously optimistic as regional competition continued to impact its performance, with better contribution from its Singapore operations.
“It would continue to make improvements to its attractions, facilities and infrastructure to meet the expectations of its valued guests,” Genting said, adding that construction of its West Zone had started and was expected to commence operations next year.
“The past two months have seen a slew of activities within the Genting group. While the UK asset transfer is largely neutral for the parent Genting Bhd, Genting Malaysia’s winning bid for the Aqueduct racino and our significant earnings upgrade for Genting Singapore following a stellar 2Q10 for Resorts World Sentosa are positive,” it said.
While remaining neutral on Genting Malaysia, CIMB said it was bullish on Genting Singapore due to its strong results.
“The key winner to emerge from these developments is Genting Singapore. The sale of its UK asset will allow management to concentrate on its flagship property, Resorts World Sentosa. More importantly, its strong 2QFY10 results thumped all expectations and stamped Genting Singapore’s mark as Singapore’s gaming market leader in 2Q,” it added.
Genting gained one sen to close at RM9 yesterday with 6.2 million shares traded.
This article appeared in The Edge Financial Daily, August 27 2010.
Written by Max Koh
Friday, 27 August 2010 13:59
KUALA LUMPUR: Lady Luck is smiling on Genting Bhd.
The group posted its highest quarterly pre-tax profit ever of RM1.59 billion for the second quarter ended June 30, 2010 (2QFY10), up 179% from RM570.45 million a year earlier, boosted by the newly opened Singapore operations.
Its net profit jumped 244.6% to RM739.17 million for the quarter, from RM214.49 million a year earlier. Revenue doubled to RM4.09 billion from RM2.1 billion, while earnings per share improved to 20 sen from 5.8 sen. It also declared a dividend of 3.3 sen per share for 1H10.
Genting said the increase in revenue and profitability came mainly from its leisure and hospitality division with the commencement of the Resorts World Sentosa operations in Singapore.
Within the leisure and hospitality division, its Singapore operations contributed RM2.03 billion in revenue, compared with RM1.2 billion from Malaysia, and RM250 million from UK and others. Another RM607.6 million in revenue came from its power, plantation, property and investment divisions.
The Singapore operations contributed a pre-tax profit of RM1.19 billion for the quarter, compared with RM592.3 million from Malaysia. This gave the Singapore operations a higher pre-tax profit margin of 58.6% versus 49.3% for Malaysia.
“The improved revenue from Resorts World Genting is mainly due to better luck factor in the premium players business. The UK casino business in 2QFY10 also benefited from an increase in business volume. However, the weaker pound translated to lower casino revenue in ringgit terms,” it said in a filing with Bursa Malaysia.
The group’s plantation arm, Genting Plantations Bhd, also saw higher revenue and profit due to higher palm products prices and increased fresh fruit bunch (FFB) production.
However, the group’s power division, Genting Energy Ltd, recorded lower revenue due to lower generation of electricity by the Meizhou Wan power plant in China.
“The oil & gas division also posted lower revenue and profit, as a result of lower share of entitlement in China despite higher average oil prices achieved, as well as higher expenses incurred. The share of results in jointly controlled entities and associates increased in 2Q10, as the results in 2Q09 was impacted by the share of loss in a jointly controlled entity in Genting Singapore Plc arising from lower property valuation of a property in London,” Genting said.
For the first half ended June 30, 2010, the group posted RM971.6 million in net profit on the back of RM7.2 billion in revenue, due to higher contribution from the leisure and hospitality, plantation and property divisions.
The period also saw a net impairment loss of RM1.3 billion and net dilution gain of RM436.3 million, which arose from the company’s shareholding in Genting Singapore, when the remaining S$450 million convertible bonds were fully converted into new ordinary shares of Genting Singapore in 1H10.
“The net fair value gain on derivative financial instruments of RM67.9 million was mainly in respect of Genting Singapore’s fair value gain on derivative financial instruments from the valuation of the conversion option embedded in the convertible bonds,” it said.
For the rest of the year, the group said it was cautiously optimistic as regional competition continued to impact its performance, with better contribution from its Singapore operations.
“With the opening of Marina Bay Sands, Resorts World Sentosa’s business showed resilience and its business model displayed impressive strength.
“It would continue to make improvements to its attractions, facilities and infrastructure to meet the expectations of its valued guests,” Genting said, adding that construction of its West Zone had started and was expected to commence operations next year.
On Wednesday, CIMB Research maintained its outperform call on Genting with the target price raised to RM10.90 from RM9.40. It also raised its FY10-12 earnings per share (EPS) for Genting by 27%-32%.
“The past two months have seen a slew of activities within the Genting group. While the UK asset transfer is largely neutral for the parent Genting Bhd, Genting Malaysia’s winning bid for the Aqueduct racino and our significant earnings upgrade for Genting Singapore following a stellar 2Q10 for Resorts World Sentosa are positive,” it said.
While remaining neutral on Genting Malaysia, CIMB said it was bullish on Genting Singapore due to its strong results.
“The key winner to emerge from these developments is Genting Singapore. The sale of its UK asset will allow management to concentrate on its flagship property, Resorts World Sentosa. More importantly, its strong 2QFY10 results thumped all expectations and stamped Genting Singapore’s mark as Singapore’s gaming market leader in 2Q,” it added.
Genting gained one sen to close at RM9 yesterday with 6.2 million shares traded.
This article appeared in The Edge Financial Daily, August 27 2010.
Sunday, 29 August 2010
Gambling hard for the money
Saturday August 28, 2010
Gambling hard for the money
INSIGHT DOWN SOUTH
By SEAH CHIANG NEE
Singapore is winning big thanks to the new casinos in the city-state. But the high-rollers are also losing large amounts of money, causing consternation among the public. The gambling habit, it seems, has become deeply entrenched.
SIX months ago, Singapore’s history took a crucial turn when it opened the first of its two casino resorts that cost US$10 billion to build.
Today, both of them seem to be packing the crowd in, including high rollers who believe that they have to bet big to win big.
So far the winners are Marina Bay Sands (MBS) and Resorts World Sentosa (RWS) and, of course, the Singapore economy.
Like their peers elsewhere, the new industry here is beginning to accumulate something resembling its own Hall of Misfortunes.
On top of the list is local businessman Henry Quek, who lost S$26.3 million after a few day’s work at the baccarat table in the Malaysian-owned Sentosa casino.
According to Today newspaper, his misadventure began in March only a few weeks after its launch when he was granted a credit line of S$500,000.
It was eventually raised higher and higher to S$2 million, and his losses mounted.
At one stage, his girl companion cried for the casino to stop providing him any more credit.
In a single day, the managing director of a seafood-processing and trading company had lost S$18million, playing at S$400,000 a hand.
Quek, in his 50s, initially lost a larger amount, but managed to reduce it to S$16.3 million, a close friend told a reporter.
He has since paid part of it, but still owes the operators S$11 million.
The moustachioed Quek is also the president of the Seafood Industries Association Singapore. Normally loud-talking, he is now rather quiet, according to his high-roller friend.
There have been others. Two days later, Chinese newspapers reported that Taiwan pop star Jay Chou lost S$2 million playing at Marina Bay.
An online source said 12 gamblers had chalked up unpaid losses of S$5-S$11 million, and about 200 Malaysians and Chinese still had unpaid losses ranging from S$500,000 to $2 million.
Blogger Merl Haggard reported he knew of another wealthy Singaporean who was worth “at least S$300 million” also lost S$26 million at Sentosa, but there has been no confirmation.
Despite disincentives, Singaporeans are believed to make up one third of the total casino gamblers.
The rest are foreigners who come from Malaysia, China and the region.
There have been winners, too, but unlike losers – the big ones are often publicised. The most common are winnings of S$100,000 to S$200,000 each.
Early this month, an ethnic Chinese from Indonesia won the biggest jackpot payout of S$2.2 million.
In April, a French tourist struck a S$1.66 million jackpot.
Today, the sentiment has changed dramatically compared to the gloomy projections just before the launch, when most analysts were predicting failure.
Some even labelled the investment a potential disaster. Today, the opposite is happening.
The two casinos are earning more than S$16 million a day - or a prospective S$6 billion a year.
Resort World Sentosa alone could hit a S$1 billion profit jackpot in 2010.
Revenue-wise, the overall big winner is Singapore which has attracted some four million new tourists.
It has become the second biggest casino market in Asia after Macau, and looks set to replace Las Vegas as the second biggest revenue earner after Macau in three years’ time
Despite its size, Quek’s story pales in comparison to the tragedy of Chia Teck Leng, nicknamed Singapore’s “King of Gamblers.”
In 2005, Chia, 44, was sentenced to 42 years imprisonment for committing the largest commercial fraud in history.
The then finance executive of an MNC, he swindled four banks of S$117 million to feed his gambling habit.
He gambled big and lost big in casinos in Australia, Britain, Hong Kong, Malaysia, Cambodia and the Philippines, which sometimes flew him there in private jets.
Chia’s precise losses were not known, but it was not too far behind the world record held by US businessman, Terrence Watanable, who lost US$127 million over a year in Las Vegas.
The others included Zhenli Ye Gon, who blew US$125 million at The Strip and Australian billionaire, Kerry Packer, who reportedly lost up to US$40 million in 10 months.
The recent cases of mega-losses have stirred up more public derision than sympathy.
But the society’s overriding concern remains the potential negative impact on society at large.
Before the casinos came, Singaporeans were already spending S$6 billion a year on legal gambling, plus another $1.5 billion in cruises and offshore casinos.
Two years ago, a government survey found about 1.95 million Singaporean adults – or 54% - had indulged in some form of gambling in the previous year.
“Pathological gamblers” make up to 1.6%, or 56,000 people.
To minimise widespread casino gambling, the government has imposed a S$100 entry fee per day, and allows families to apply to stop a habitual gambling member from going in.
Has it worked? It does not seem so.
Sadly, up to a million Singapo-reans are predicted to want to try their luck this year.
http://thestar.com.my/columnists/story.asp?file=/2010/8/28/columnists/insightdownsouth/6934153&sec=insightdownsouth
Gambling hard for the money
INSIGHT DOWN SOUTH
By SEAH CHIANG NEE
Singapore is winning big thanks to the new casinos in the city-state. But the high-rollers are also losing large amounts of money, causing consternation among the public. The gambling habit, it seems, has become deeply entrenched.
SIX months ago, Singapore’s history took a crucial turn when it opened the first of its two casino resorts that cost US$10 billion to build.
Today, both of them seem to be packing the crowd in, including high rollers who believe that they have to bet big to win big.
So far the winners are Marina Bay Sands (MBS) and Resorts World Sentosa (RWS) and, of course, the Singapore economy.
Like their peers elsewhere, the new industry here is beginning to accumulate something resembling its own Hall of Misfortunes.
On top of the list is local businessman Henry Quek, who lost S$26.3 million after a few day’s work at the baccarat table in the Malaysian-owned Sentosa casino.
According to Today newspaper, his misadventure began in March only a few weeks after its launch when he was granted a credit line of S$500,000.
It was eventually raised higher and higher to S$2 million, and his losses mounted.
At one stage, his girl companion cried for the casino to stop providing him any more credit.
In a single day, the managing director of a seafood-processing and trading company had lost S$18million, playing at S$400,000 a hand.
Quek, in his 50s, initially lost a larger amount, but managed to reduce it to S$16.3 million, a close friend told a reporter.
He has since paid part of it, but still owes the operators S$11 million.
The moustachioed Quek is also the president of the Seafood Industries Association Singapore. Normally loud-talking, he is now rather quiet, according to his high-roller friend.
There have been others. Two days later, Chinese newspapers reported that Taiwan pop star Jay Chou lost S$2 million playing at Marina Bay.
An online source said 12 gamblers had chalked up unpaid losses of S$5-S$11 million, and about 200 Malaysians and Chinese still had unpaid losses ranging from S$500,000 to $2 million.
Blogger Merl Haggard reported he knew of another wealthy Singaporean who was worth “at least S$300 million” also lost S$26 million at Sentosa, but there has been no confirmation.
Despite disincentives, Singaporeans are believed to make up one third of the total casino gamblers.
The rest are foreigners who come from Malaysia, China and the region.
There have been winners, too, but unlike losers – the big ones are often publicised. The most common are winnings of S$100,000 to S$200,000 each.
Early this month, an ethnic Chinese from Indonesia won the biggest jackpot payout of S$2.2 million.
In April, a French tourist struck a S$1.66 million jackpot.
Today, the sentiment has changed dramatically compared to the gloomy projections just before the launch, when most analysts were predicting failure.
Some even labelled the investment a potential disaster. Today, the opposite is happening.
The two casinos are earning more than S$16 million a day - or a prospective S$6 billion a year.
Resort World Sentosa alone could hit a S$1 billion profit jackpot in 2010.
Revenue-wise, the overall big winner is Singapore which has attracted some four million new tourists.
It has become the second biggest casino market in Asia after Macau, and looks set to replace Las Vegas as the second biggest revenue earner after Macau in three years’ time
Despite its size, Quek’s story pales in comparison to the tragedy of Chia Teck Leng, nicknamed Singapore’s “King of Gamblers.”
In 2005, Chia, 44, was sentenced to 42 years imprisonment for committing the largest commercial fraud in history.
The then finance executive of an MNC, he swindled four banks of S$117 million to feed his gambling habit.
He gambled big and lost big in casinos in Australia, Britain, Hong Kong, Malaysia, Cambodia and the Philippines, which sometimes flew him there in private jets.
Chia’s precise losses were not known, but it was not too far behind the world record held by US businessman, Terrence Watanable, who lost US$127 million over a year in Las Vegas.
The others included Zhenli Ye Gon, who blew US$125 million at The Strip and Australian billionaire, Kerry Packer, who reportedly lost up to US$40 million in 10 months.
The recent cases of mega-losses have stirred up more public derision than sympathy.
But the society’s overriding concern remains the potential negative impact on society at large.
Before the casinos came, Singaporeans were already spending S$6 billion a year on legal gambling, plus another $1.5 billion in cruises and offshore casinos.
Two years ago, a government survey found about 1.95 million Singaporean adults – or 54% - had indulged in some form of gambling in the previous year.
“Pathological gamblers” make up to 1.6%, or 56,000 people.
To minimise widespread casino gambling, the government has imposed a S$100 entry fee per day, and allows families to apply to stop a habitual gambling member from going in.
Has it worked? It does not seem so.
Sadly, up to a million Singapo-reans are predicted to want to try their luck this year.
http://thestar.com.my/columnists/story.asp?file=/2010/8/28/columnists/insightdownsouth/6934153&sec=insightdownsouth
Tuesday, 23 February 2010
Genting Singapore reports net loss of S$277.56m for FY2009
Genting Singapore reports net loss of S$277.56m for FY2009
Written by Joseph Chin
Friday, 19 February 2010 20:12
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KUALA LUMPUR: Genting Singapore plc posted net losses of S$277.56 million (RM 669 million) in the financial year ended Dec 31, 2009 versus S$124.80 million a year ago due to losses in derivative financial instruments, higher pre-operating expenses and lower contribution from its UK casino operations.
It told the Singapore Exchange today that consolidated revenue was S$491.2 million in FY2009 compared to S$630.7 million in 2008. The reduction is mainly due to a decrease of S$141.8 million in revenue from the group’s UK casino operations.
It added revenue from the UK casino operations were depressed by lower business volumes. The reduction was further exacerbated by the weakening of the sterling pound against the Singapore dollar.
Genting Singapore's loss before taxation increased from S$148.5 million in the previous financial year to S$265.7 million in the current financial year.
This was mainly due to:
a) Fair value loss on derivative financial instruments in the current financial year of S$108.3 million arising mainly from the valuation of the conversion option embedded in the group’s convertible bonds as compared to a fair value gain of S$37.2 million recognised in 2008;
b) Increase in pre-operating expenses incurred for the integrated resort in Singapore of S$103.4 million. The higher pre-operating costs is mainly in relation to staff costs incurred as the integrated resort begins to accelerate its recruitment, training, sales and marketing programs prior to its launch;
c) Lower interest income of S$3.8 million for the current financial year compared against S$13.2 million in 2008;
d) Share of losses from jointly controlled entities of S$8.9 million;
e) The estimated one-third share of after tax profits of the international betting division, which was disposed by the group in 2007. The group had on March 22, 2007 completed the disposal of its 50% interest in international betting operations for a cash consideration of S$3.3 million.
Written by Joseph Chin
Friday, 19 February 2010 20:12
Bookmark and Share
KUALA LUMPUR: Genting Singapore plc posted net losses of S$277.56 million (RM 669 million) in the financial year ended Dec 31, 2009 versus S$124.80 million a year ago due to losses in derivative financial instruments, higher pre-operating expenses and lower contribution from its UK casino operations.
It told the Singapore Exchange today that consolidated revenue was S$491.2 million in FY2009 compared to S$630.7 million in 2008. The reduction is mainly due to a decrease of S$141.8 million in revenue from the group’s UK casino operations.
It added revenue from the UK casino operations were depressed by lower business volumes. The reduction was further exacerbated by the weakening of the sterling pound against the Singapore dollar.
Genting Singapore's loss before taxation increased from S$148.5 million in the previous financial year to S$265.7 million in the current financial year.
This was mainly due to:
a) Fair value loss on derivative financial instruments in the current financial year of S$108.3 million arising mainly from the valuation of the conversion option embedded in the group’s convertible bonds as compared to a fair value gain of S$37.2 million recognised in 2008;
b) Increase in pre-operating expenses incurred for the integrated resort in Singapore of S$103.4 million. The higher pre-operating costs is mainly in relation to staff costs incurred as the integrated resort begins to accelerate its recruitment, training, sales and marketing programs prior to its launch;
c) Lower interest income of S$3.8 million for the current financial year compared against S$13.2 million in 2008;
d) Share of losses from jointly controlled entities of S$8.9 million;
e) The estimated one-third share of after tax profits of the international betting division, which was disposed by the group in 2007. The group had on March 22, 2007 completed the disposal of its 50% interest in international betting operations for a cash consideration of S$3.3 million.
Sunday, 31 January 2010
Dealers say one of the biggest casualties of the margin calls is Resorts World at Sentosa operator Genting Singapore PLC.
Mid-Week Comment Jan 27: Margin calls, S-chip woes drag down STI
Tags: China Milk Products Group | China Printg & Dyeing Hldg | Delong Holdings | Ferrochina | Genting Singapore Plc | Ks Energy Services | New Lakeside Holdings | Sunshine Holdings
Written by Goola Warden
Thursday, 28 January 2010 09:16
ON WEDNESDAY, ‘forced selling’ by local traders on margin calls hit the market and drove the benchmark Straits Times Index down a further 34 points to close at 2,706.26. In all, the STI has fallen 187 points since last Wednesday, and 227 points from its Jan 11 high of 2,933.
Dealers say one of the biggest casualties of the margin calls is Resorts World at Sentosa operator Genting Singapore PLC. Its share price is down almost 20% since the start of the year. According to a report by DBS Group Research, there could be a potential share overhang from the “mandatory conversion of remaining $321 million Convertible Bonds 2 at 95 cents (338 million shares) on Feb 9”.
Separately, KS Energy Services, the offshore oil & gas and marine services and support company run by Indonesian millionaire Kris Wiluan, announced it plans to issue $50 million in principal amount of 3% convertible bonds due 2015 at an issue price of 89.34% of the principal. The $44.67 million raised will be used to refinance existing debts. The initial conversion price is $1.60 per share, representing a 30% premium to its last traded price of $1.23. KS Energy may also undertake a further issue of convertible bonds worth up to $57 million if required.
According to OCBC Investment Research, the funds are likely to be used because bondholders of the previous tranche of convertible bonds issued in 2007 might opt for early redemption. The bonds issued to Stark funds were at a conversion price of $4.05. “Early redemption would require a yield to maturity of 5.5% for Stark, and we therefore estimate KS Energy would need about $113 million ready,” OCBC says. The report believes that KS Energy could come to the market with new shares “at any time, given the capital-intensive nature of its business” and has a “hold” recommendation.
Convertible bonds have been a poisoned chalice of sorts for some stocks, particularly S-chips. On Monday, the South China Morning Post said six of 11 S-chips which sold convertible bonds between 2005 and 2008 have insufficient funds to repay their convertible bondholders. The S-chips named were China Milk Products Group, steel coil maker Delong Holdings, property developer Sunshine Holdings, China Printing & Dyeing Holding, waste treatment services provider Sino-Environment Technology Group and steel group FerroChina.
Meanwhile, a local broker report says S-chip New Lakeside Holdings, the producer of apple concentrate, could be insolvent, following the company’s decision to make an RMB22.75 million ($4.7 million) provision for its liability to Bank of China. This may also force the other two principal bankers China Construction Bank and ICBC to demand immediate repayment of RMB14.5 million and RMB10 million. As a result of these claims, the company’s liabilities will exceed its assets.
To be sure, Singapore stocks weren’t the only ones being sold down. Markets everywhere in Asia reeled, largely because of China’s credit-tightening measures. According to a Citigroup Research report dated Jan 25, Asian fund inflows were down 94% week-on-week to US$29 million ($40.7 million) last week. Month-to-date, net inflows to Asian funds barely rose above US$670 million, the report says. This is much smaller than average inflows of US$2.1 billion in the month of January between 2004 and 2007. Asian fund inflows were dampened by China tightening and the strong dollar, the report says.
CHART VIEW
The market is becoming increasingly “oversold” based on short-term oscillators. For the STI, the 21-day RSI is at 34% and the 14-day RSI at 24%. These are at their lowest levels since March last year. Support appears in the 2,700 area which was tested several times before the index eventually broke out. On the flip side, the STI is below its still rising 100-day moving average now at 2,748 and the 200-day moving average at 2,539. With support appearing soon, and indicators — including the five-day stochastics — at extreme lows, the market should attempt a rebound at resistance level to 2,748. A stronger upmove would only develop after a series of positive divergences, which would take four to five weeks to develop.
http://www.theedgesingapore.com/blog-heads/goola-warden/12036-mid-week-comment-jan-27-margin-calls-s-chip-woes-drag-down-sti.html
Tags: China Milk Products Group | China Printg & Dyeing Hldg | Delong Holdings | Ferrochina | Genting Singapore Plc | Ks Energy Services | New Lakeside Holdings | Sunshine Holdings
Written by Goola Warden
Thursday, 28 January 2010 09:16
ON WEDNESDAY, ‘forced selling’ by local traders on margin calls hit the market and drove the benchmark Straits Times Index down a further 34 points to close at 2,706.26. In all, the STI has fallen 187 points since last Wednesday, and 227 points from its Jan 11 high of 2,933.
Dealers say one of the biggest casualties of the margin calls is Resorts World at Sentosa operator Genting Singapore PLC. Its share price is down almost 20% since the start of the year. According to a report by DBS Group Research, there could be a potential share overhang from the “mandatory conversion of remaining $321 million Convertible Bonds 2 at 95 cents (338 million shares) on Feb 9”.
Separately, KS Energy Services, the offshore oil & gas and marine services and support company run by Indonesian millionaire Kris Wiluan, announced it plans to issue $50 million in principal amount of 3% convertible bonds due 2015 at an issue price of 89.34% of the principal. The $44.67 million raised will be used to refinance existing debts. The initial conversion price is $1.60 per share, representing a 30% premium to its last traded price of $1.23. KS Energy may also undertake a further issue of convertible bonds worth up to $57 million if required.
According to OCBC Investment Research, the funds are likely to be used because bondholders of the previous tranche of convertible bonds issued in 2007 might opt for early redemption. The bonds issued to Stark funds were at a conversion price of $4.05. “Early redemption would require a yield to maturity of 5.5% for Stark, and we therefore estimate KS Energy would need about $113 million ready,” OCBC says. The report believes that KS Energy could come to the market with new shares “at any time, given the capital-intensive nature of its business” and has a “hold” recommendation.
Convertible bonds have been a poisoned chalice of sorts for some stocks, particularly S-chips. On Monday, the South China Morning Post said six of 11 S-chips which sold convertible bonds between 2005 and 2008 have insufficient funds to repay their convertible bondholders. The S-chips named were China Milk Products Group, steel coil maker Delong Holdings, property developer Sunshine Holdings, China Printing & Dyeing Holding, waste treatment services provider Sino-Environment Technology Group and steel group FerroChina.
Meanwhile, a local broker report says S-chip New Lakeside Holdings, the producer of apple concentrate, could be insolvent, following the company’s decision to make an RMB22.75 million ($4.7 million) provision for its liability to Bank of China. This may also force the other two principal bankers China Construction Bank and ICBC to demand immediate repayment of RMB14.5 million and RMB10 million. As a result of these claims, the company’s liabilities will exceed its assets.
To be sure, Singapore stocks weren’t the only ones being sold down. Markets everywhere in Asia reeled, largely because of China’s credit-tightening measures. According to a Citigroup Research report dated Jan 25, Asian fund inflows were down 94% week-on-week to US$29 million ($40.7 million) last week. Month-to-date, net inflows to Asian funds barely rose above US$670 million, the report says. This is much smaller than average inflows of US$2.1 billion in the month of January between 2004 and 2007. Asian fund inflows were dampened by China tightening and the strong dollar, the report says.
CHART VIEW
The market is becoming increasingly “oversold” based on short-term oscillators. For the STI, the 21-day RSI is at 34% and the 14-day RSI at 24%. These are at their lowest levels since March last year. Support appears in the 2,700 area which was tested several times before the index eventually broke out. On the flip side, the STI is below its still rising 100-day moving average now at 2,748 and the 200-day moving average at 2,539. With support appearing soon, and indicators — including the five-day stochastics — at extreme lows, the market should attempt a rebound at resistance level to 2,748. A stronger upmove would only develop after a series of positive divergences, which would take four to five weeks to develop.
http://www.theedgesingapore.com/blog-heads/goola-warden/12036-mid-week-comment-jan-27-margin-calls-s-chip-woes-drag-down-sti.html
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