Genting

VERY IMPORTANT EDIT HERE:

At this moment in time, I have some small amounts of short positions in Genting, made via CFD via POEMS, Singapore. (phillips online e-mart)
I was reminded by a friend that it is only ethical to state that I have a personal stake. However, I would like to clarify that I am a long term investor not a trader, and thus do not really care whether Genting drops in the short term or not. I am going to wait until the profit figures come in before closing my position. However, considering the current economic climate, I think I'll be holding onto this position for quite a while....


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Genting shares have been spiking upwards lately. Some say it is a recovery. Partly true. Part of it was the recent worldwide rally. Another factor is: Las Vegas Sands> Singapore.
Sands had seemed in danger of liquidity issues. So, there was speculation that they would be selling off their stake in Marina Bay. The likely buyer? Genting, of course! This would have been a big boost, as Genting’s own resort on Sentosa is considered inferior.
But Sands seems to be fine now. And they are closing many other projects, but NOT MARINA BAY. Which they are going to push aggresively as soon it is ready at the end of 2009. Which will give them time to set up a loyalty base before Sentosa complete in 2010.
The question now is: If you were a bigshot VIP. Would you want to go to Sands Marina Bay, Genting Sentosa, or Genting Highlands? … yeah, me too. So, in other words, you can expect some pretty UGLY financial figures coming out for Genting in the coming years.
Considering how cheap AirAsia is now, with fuel surcharge dropped, I think even the smalltime gamblers are going to be abandoning Genting Highlands for Marina Bay.
Seriously, the last time I went up to Genting, their casino was looking really seedy and low class. Even the small time gambler wants a bit of AMBIENCE… you know?
Genting also chose a rather poor time to expand very very aggresively. They’ve probably overstretched themselves and also paid far too much in return for far too little. Genting. The fellas who set up a well-run casino are NOT STUPID. There’s a reason they were willing to sell to you. There’s probably some nasty little problems that they were in a better position to know than you (since they live in that area every day, and you live in freaking Malaysia).
Basically, I always used to like holding Genting for one reason, and one reason only: Genting had a very strong monopoly. It had the only casino in the area. Even though, frankly, Genting casino is on a mountain. In the jungle. In the middle of nowhere. It still had a monopoly!
Now… the monopoly is threatened. By Sands Marina Bay (and AirAsia cheap flights).
My recommendation: dump Genting like a rock. Having a rival casino that is newer and fancier and everything means that it’s long term prospects are bad. And the economic crisis means it’s short term prospects are bad too. Dump Dump Dump!