Genting Stock Slumps Amidst Delay

Genting International will not be getting much of a headstart to its casino operations after the issuance of its license was delayed. This delay coupled with its "overvaluation" could be one of the reasons why the stock price has dropped. See article below:

GENTING Singapore, a unit of Asia's largest publicly traded gaming company, fell in Singapore on concern the issuance of its license to operate a casino in the city-state may be delayed, Bloomberg news reported.

The stock dropped as much as 3.2 per cent to S$1.22, and traded at S$1.23 as of 3.59 pm in Singapore. Genting more than tripled in the past year, compared with a 68 per cent gain for the benchmark Straits Times Index.

While the company's US$4.5 billion (S$6.32 billion) Resorts World Sentosa started accepting guests at its four hotels and 10 restaurants on Wednesday, the operating licence for its casino may only be issued by the end of February or in March.

Goldman Sachs Group Inc said it had expected the casino and the Universal Studios to open by the end of this month. The brokerage reiterated its 'sell' rating on Genting, saying a delay in the casino opening is a 'major negative.'

'Even ignoring the disappointment on the opening delay, we believe Genting Singapore is overvalued versus its global casino peers,' Goldman Sachs analyst David Ng wrote in a report today.

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