The Face of the Redeemer

Atop the high mountain facing Rio De Janeiro, the face of the Redeemer shines in all its radiating resplendence.

A glance of its majesty quiets many a troubled heart and bring hope and joy to those in need of such affections.

See these pictures and bask in the glory of the Redeemer. 

GENM–STUNTED GROWTH WHIPPING BOY OF THE STABLE

Genting Berhad (GenBhd) has not really been fair to its minority shareholders. 

Seen from a narrow selfish perspective, minority shareholders would have loved good dividends and possible share offerings as part of their loyalty for holding on to the stock for such a long time sine the earlier split to a 10 sen par value per share.

Yes, it was blatantly clear that more than RM5 billion of cash reserve was partially used to make Genting Singapore (GenS) to appear like a princess at a coming-out ball. Today, GenS is a darling churning out extraordinary profits while Genting Malaysia slinered away as an unpolished diamond. Lim Kok Thay has demmed it fit to neglect GernM shareholders at the expense of making GenS and GenBhd to be the new winners.

Some may feel that Lim is justified to bail out GenS at the initial phase of its Sentosa operation rather than allowing its cash pile to remain idle. The bone of contention of many was he could just give them some special dividends instead of a nothing to you kind of choice. Now that  it is busy ploughing funds into its global expansion programme, we would have hoped that the share price would have gone up too. That sounds hollow too!

Yes, they have  been making some headway in the global leisure and hospitality industry over the last one year, gaining a foothold in the European and American markets.

GenM completed its acquisition of Genting Singapore plc's casino operations in the United Kingdom for a total cash consideration of 340mil (RM1.67bil) in October 2010. The operations there boast the largest number of casino properties in the United Kingdom, with 44 units, including five in London and have just begin to see some maiden revenue contribution to bottom line.

Last month, GenM took a real estate development venture gamble in Florida after the Aqueduct Racetrack video lottery facility project in New York City in August 2010. 

Be that as it may, we must all expect such endeavour to boost the company's earnings potential over the medium to longer term.

So let us have a snapshot of what is happening at GenM.

As at the end of the first quarter (Q1) to March 2011, Genting Malaysia had an estimated net cash of RM2bil. The company had an accumulated cash hoard of RM2.87bil at the end of financial year (FY) ended Dec 31, 2010, compared with RM5.25bil at the end of FY2009.

Genting Malaysia announced its acquisition of a 13.9 acres in Miami for US$236mil (RM718mil) last month. It plans to finance the deal through a combination of internally-generated funds and bank borrowings.

The acquisition, which was done through subsidiary Bayfront 2011 Property LLC, worked out to be US$390 per sq ft, which most analysts considered a fair price to pay for the premium location, and some considered the deal was to Genting Malaysia's advantage, given the still-strong ringgit against the dollar.

OSK Research's recent analysis of Genting Malaysia's Miami venture said GenM's cash hoard has rightly put the group in a position as first-mover in a potentially lucrative integrated casino market should Florida liberalise the industry. Do we dare hope for this as Aqueduct still do not have table games approved?

Gaming operations are currently banned from being built outside tribal lands by the state, although gaming giants such as the US-based Las Vegas Sands Corp have been lobbying to persuade lawmakers to allow for full casino gambling in the state.

According to OSK Research, casino income typically contributes more than 80% of Genting Malaysia's integrated property portfolios.

Hence, the liberalisation of the casino industry in Florida is crucial for the company to unlock value from its Miami investment. Read  ‘crucial’ to mean ‘not easy’.

Genting Malaysia has said that it plans to build a US$3bil (RM9.12bil) mixed development project comprising hotel, convention centres, restaurants, shopping malls and residential towers on the land it bought in Miami.

Last week, the company announced it had already appointed a local architect, Arquitectonica, to draw the master plan for its Resorts World Miami project, with the initial draft expected to be ready by the end of August.

What's missing at this point in time is the local authority's approval to build a casino operation there.

“Should it get a licence to operate a casino there, the payback for its investments in the Miami project would definitely be much faster, and that would serve as a much bigger catalyst in earnings potential,” an analyst explains.

According to market observers, the process of the company securing a casino licence in Florida, if it ever will, could take several years. How sad. Boo-hoo!

Hence, it is widely believed that Genting Malaysia would not rush into developing the Miami land. Pending further details, most analysts therefore remain neutral to mildly positive on the company's prospects there.

Meanwhile, construction of Genting Malaysia's New York operations is steadily making progress, with the opening of Resorts World New York slated for the fourth quarter of this year. Contributions from the New York venture will likely be more meaningful after its full launch in the first quarter of next year. So, watch the stock price after Chinese New Year 2012.

To recap, Genting Malaysia won the bid to develop and operate a video lottery facility at the Aqueduct Racetrack in New York City in September last year through its subsidiary Genting New York LLC.

The facility, now known as Resorts World New York, will feature about 4,500 video lottery terminals, convention halls and food and beverage outlets and other resort facilities.

Earlier reports said Resorts World New York could potentially contribute around RM600mil and RM200mil to Genting Malaysia's revenue and profits, respectively, by 2013. This estimate was based on an assumption of a daily win per terminal of US$300.

An analyst tells StarBizWeek that the initial period of Resorts World New York's operations could still likely be plagued by some teething problems that could affect earnings contributions, but the longer-term prospects remain bright, and could potentially generate better-than-expected earnings like what the group's UK operations did recently. So, GenM could still feel the whip for quite sometime till the porridge starts boiling.

GenM's UK casino operations have started contributing to the group's revenue since the fourth quarter of last year. In its latest reported quarter, contributions from the UK business were surprisingly strong that they lifted the company's earnings above market expectations.

GenM saw its net profit for 1QFY11 soared to RM417.7mil on revenue of RM1.95bil, compared with a net profit of RM272.3mil and revenue of RM1.35bil in the corresponding period last year.

In a statement, the group said it attributed its encouraging financial performance during the quarter in review partly to its UK casino operations, which generated a profit of RM60.1mil on revenue of RM346.6mil.

In the preceding quarter, GenM's UK operations actually posted loss of RM2.1mil on a maiden revenue contribution of RM188.4mil to the group.

“The group's UK operations seemed to have turned around now, and we expect earnings from the operations there to continue improving in the coming quarters, albeit at a more volatile rate, considering the uncertainties surrounding the UK's economy,” so claims an analyst.

But what's more reassuring, as indicated by GenM's first-quarter result, is the fact that the cannibalisation of market share, expected to result from the rising competition from the two new casinos in Singapore, did not seem to have happened at a scale that would significantly impact the company's existing casino and resort operations in Malaysia. 

“The company's core operations in Malaysia remain resilient despite the competition from the two casinos in Singapore, and this trend will likely continue in the coming quarters,” the analyst explains. Hopefully, it will recede in the following quarters.

Genting Malaysia's parent, Genting Bhd, holds a majority stake in the Resorts World Sentosa in Singapore, which happens to be the country's first casino resort.

Apart from a casino, the facility there houses the Universal Studios Singapore theme park, Marine Life Park, hotels and a host of other dining, shopping and entertainment offerings. The group's Singapore operations compete with the Marina Bay Sands casino resort built by Las Vegas Sands.

“Growth in Asia remains exciting for the industry, but in Malaysia, the market has already matured. Venturing abroad is the right option to diversify its business and avoid hitting a revenue plateau,” an analyst says.

I do hope Kok Thay will be more generous in the midst of making profits from the overseas ventures.

So, when are you proposing some goodies for GenM minority shareholders?

After Your Own Heart

You have to give credit to her.

She knows how to entice and she knows how to get the lime-light.

Yes, and continuously.

Just before you think you can write her off the radar, here she comes again,  almost icon-like to take your breath away.

Siti Nurhaliza-way to go!

Predator versus Alien

Yes, everyday they are at it.

The Predator and Alien. 

Remember these two silver screen creatures? One was made famous by Arnold Muscleman from Austria alias Gubernator and the other by Sigourney Weaver.

The same goes on everyday on Bursa KL. Big bad Mama of a player that is Predator is no other than nasty EPF seeking profits at the expense of the other players. Smart alecs-this EPF player. They dump shares until almost kingdom come, like in search of prey. Some can withstand it, others will fell by the wayside.

Everyday I see EPF throwing YTL Corp shares down the chute in search of better prey such as KLK and KLCCP.

Meanwhile, YTL Corp goes on a vacuuming spree trying to take out this Predator.

Yesterday, YTL Corp hiked the shares up by 4 sen with the last two lots done. Expect a fall this morning.

Most likely-unless EPF has sold out what it wanted to through its selling agents.

Do we expect any signs of cessation, EPF?

PS:

FYI, the last 2 days saw EPF buying in 2 million YTL Corp shares.

Change of heart, EPF?

MSM Prices IPO at RM3.50-Fair Price?

I do hope MSM will not do the hop,skip and jump down the gutter like UOA Development. And hopefully too-not like XOX which is at sea or worse, gone to sea, after plunging almost 35% on the first day of listing. I think it could be the unjustified rich valuation which have been the cause though not the main one. The culprits are short sellers having a field day on their keyboards selling down these shares till they arrived ' in Holland'. Definitely the case with UOA Development which is a more solid counter with EPF as the cornerstone player.

 

Now, back to MSM.

MSM , has priced its IPO at RM3.50 per share for institutional investors, said a source with direct knowledge of the deal.

The price is at the top end of the RM3.30-RM3.50 range set earlier, valuing the IPO at about
RM817mil.

MSM is selling about 234 million shares in the IPO. The institutional portion would comprise about 206 million shares or 29.4% of the enlarged share capital.

The retail portion would consist of about 28 million shares or 4% of the enlarged share capital.

“Basically, everyone bid the whole book because they knew it was oversubscribed and they wouldn’t get any shares,” said a fund manager.

Funds raised will be used for capital expenditure and working capital requirements.

Pay PUSPAKOM the Pipe Piper

Yes, the government loves a happy winner;not an unhappy whiner!

At the way things are going, more people will become unhappy.

Apparently come dawn tomorrow,all second hand car dealers-mostly companies- or those who need to use bank borrowing to buy second hand cars will have to pay the piper-namely, PUSPAKOM for some additional inspection.

In my case,as a lumpen proletariat, I had this privilege to own a more than 15 year-old car. My usual car insurance company have decided this car and the other one I have, which is also more than a decade old, is not worth them taking any risk on.

As I have to change road tax every year for putting my car on the road, this year will be my watershed year. If my current insurance company do not want to insure my car anymore, than I can only take a third-party insurance.Before a third party insurance can be given, my car must undergo a PUSPAKOM once-over. So, I would have to cough out some money for this inspection to fatten the coffers of this company.

So now let us hear from PUSPAKOM on their brand-new source of income besides ripping off cash from yours truly.

" Puspakom set up new inspection centres and upgraded existing ones to ease the transition to the Hire Purchase Inspection (HPI) regulation that will take effect tomorrow.

It added inspection lanes in Glenmarie, Wangsa Maju, Sungai Petani, Padang Jawa and Kuching to increase the number of cars it could inspect.

It set up new centres in Taman Bukit Maluri, Pandan Mewah, Jalan Tandang (Petaling Jaya), Batu Caves, Taman Daya (Johor Baru) and Pengkalan Chepa (Kelantan).

The new regulation requires Puspakom to inspect used cars before they can be sold to another person.

The regulation requires an additional 14-point check (B7) on top of the standard four-point check (B5) in practice for many years.

Puspakom chief executive officer Hisham Othman said some inspection centres would open on weekends.

"We revised the operating hours of some centres and they may even remain open until midnight."

Hisham said there were no legal obligations for Puspakom to perform the upgrades and to extend its service hours, but felt it would be necessary to ease the transition to the new regulation.

He said Puspakom had spent RM20 billion this year in upgrades and added 121 staff to carry out inspections.

"We brought in new machines from France that will improve efficiency and reduce cost in the long run."

He said it was important to note that the new ruling was passed by Parliament last year.

"Puspakom was merely the agency appointed to oversee the enforcement of the act. Parliament had discussed at length the amendment to the Hire Purchase Act, which will finally be carried out (tomorrow) to safeguard the public's interest."

Because only car sales involving financing from banks are affected by the amendment, cash-based hire purchase agreements do not need to go through the HPI procedure.

Hisham said cars needed to be inspected only once and the B7 inspection report would need to be produced to banks upon buyers' request for financing from banks or anywhere else.

"The reason for this is because banks would want to know the condition of the cars they are financing."

"Buyers, on the other hand, would not want to be duped into buying a 'lemon', and spend more money to fix malfunctioning parts."

He said the worst-case scenario was people buying a cut-and-joined car, where either the front or rear half of another car had been welded to it. "Last year, we discovered more than 1,200 cut-and-joined cars.

"Either way, cars that are not properly serviced, or have their structural integrity compromised, are unsafe."

He said there were around 495,000 transactions made to change vehicle ownership on a consumer level every year.

Hisham added that Puspakom staff were well-qualified and were monitored by the Road Transport Department and other government agencies.

"If the public believe that Puspakom staff did not act with professionalism and integrity, they can complain to the authorities."

The public can call 1-800-88-6927 for information.

UOA Development Berhad-An IPO Folly?

Well, what do you know!

 After all the hype and the IB analysts' medicine-men talk, we ran off to the ATM to apply for this share purportedly a great buy. Though we had a nagging concern over its 5 sen par tag,we believed it was relatively a technical matter and most IB said it was of little concern anyway.

After the book-building the share price was now adjusted to RM2.60 for the institutional buyers while retail buyers got it for RM2.52 with a cash return of RM380.

With baited breath, we awaited the opening price on opening day which the analysts said will be about RM3.20. Starting at RM2.62, it went hay-wire and slid. It was a really dog day for us minority shareholders!

It is now at a new low of RM2.45 even after the parent company in Australia upped its holding while the local counterpart also pitched in.

So, who is selling? Suckers..............?

Something is amiss! Is it an IPO folly?