Effect of Genting's Asiatic disposition
Back then many have been speculating that Genting will dispose Asiatic and now that IOICorp has voiced it's interest in aquisition of companies to increase it's landbank size. Given the fact that IOI's landbank has almost reach its capacity, it make sense for it to aquire Asiatic. With Asiatic's huge landbank in Indonesia via it's JV with SG and IOI's desire to expand to Indonesia, i think both parties can work something out.
Genting holds 55% percent stake in Asiatic is valued at about 4.53B. The disposal of Asiatic will streamline Genting's group and allow them to focus more on the main core business and also help to improve Genting's cash flow ever since they started funding for the Singapore casino project.
From chart wise, Genting stock price has been falling since it's share split event in the mid of April. Investors took the news positively and the stock price rose about 5% since the opening of trading.
50 days SMA still could serve as a support level and today's closing will only reinforced it. Should the deal materialize soon, it will only drive Genting's share price further away from the oversold range.
3 comments:
I also think the deal will go through. Genting should capitalize on the high crude palm oil to get more value out of the deal.
http://www.btimes.com.my/Current_News/BT/Thursday/Nation/BT622952.txt/Article/
Unless IOI is willing to offer a min of RM8 a share to Genting for Asiatic... else i think the deal is going to stall.
Regardless of IOI's aquisition, i think Genting is selling at a discount price, P/E ratio is currently less than 11. given its opportunity in Macau, london and singapore, its relatively a cheap stock to buy. If you were to hold it for 3-5 years, you will be safe regardless of this aquisition's outcome
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