Summary: The new UK Prime Minister, Gordon Brown, has ordered a review of super casino. This is bad news for Genting International Public Ltd (GIL) as through its subsidiary Stanley Leisure, GIL is the leading contender for the super casino license. This is over and above the recent negative news that the UK government is to impose a surprise gaming tax. Incidentally the gaming tax was imposed by Gordon Brown in his role as the previous Chancellor of the Exchequer (Minister of Finance). We read Mr Brown's 2 decisions on the casino to mean that he is not in favour of American style Integrated Resort. This could potentially be negative on GIL as we have ascribed about 75% option value for the UK super casino win, and that translates to a fair value estimate of S$0.86. We maintain our HOLD recommendation for now until there is greater clarity on the issue. (Winston Liew)
For more information on the above, visit www.ocbcresearch.com for the detailed report.
NEWS HEADLINES
- - According to Moody's Investors Service, DBS, UOB and OCBC Bank, are among those in Asia-Pacific which enjoy the highest rating, but face rating risks as they expand regionally over the next few years, particularly into China, Indonesia and Vietnam.
- Sino-Environment Technology Group's CFO has indicated that it is expecting flat first-half earnings growth due to capacity constraints, but envisages a strong second half, backed by firm fundamentals.
- The Ascott Group is selling off its effective 50% stake in London-situated serviced residence Somerset Bayswater for S$172.2m and will realise a net gain of S$17.8m. Ascott has also signed a S$76.1m sale and purchase agreement to acquire its first property in Edinburgh, Scotland, slated for opening in mid-2009.
- Vita Holdings is proposing a placement of up to 52m new shares - 18% of its issued ordinary shares - at $0.25/share. The net proceeds of S$12.5m will be used primarily to fund its on-going hotel development works in Singapore.
- United Fiber System will issue US$25m of 5-year zero coupon convertible bonds to refinance its existing borrowings and expand its business operations.
- Oei Hong Leong has sold his entire 29.98% stake in China Healthcare and possibly made a profit of as much as S$14.6m from his initial investment of S$7.75m.
- China Flexible Packaging Holdings has successfully completed its placement of 20m new shares at an issue price of S$0.48 per share, raising net proceeds of about S$9.28m.
- CMZ Holdings, scheduled to start trading today on the mainboard, raised S$15.3m in its initial public offering, which was 11.5 times subscribed.
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