Genting

Genting: Malaysian gaming mogul K.T. Lim's Genting has increased its stake in Australian casino company Echo Entertainment, with purchases by Genting HK, according to the Australian Financial Review newspaper. Note that Genting bought about 20m Echo through CIMB Australia to take the Genting’s Grp stake to about 7.65%. Genting SP recently confirmed it had acquired a stake in Echo. Spokesmen for Echo and Genting Singapore declined to comment. We note that size of new stake holdings in Echo entertainment has fuelled speculation for a takeover offer for the Australian listed gaming grp, which runs 4 casinos in Sydney and Queensland. An acquisition of Echo will help Genting SP build a regional footprint and gain a competitive advantage over MBS, enabling Gen SP to cross-sell and achieve synergies among the diff casinos. According to UBS, Echo will offer a welcome boost to Gen SP, as it looks more and more likely that SG junket regime is going to remain too restrictive, but do not rule out Gen SP as being a spoiler in Crown’s (Australia Largest Casino Operator) attempt to take over Ecno entertainment, which could give the SG casinos a run for their money. All eyes will also remain on Genting SP as speculation of an alliance with Crown mounts. Australian media cited sources as saying Genting and Crown might be meeting to discuss some form of collaborations. Separately, Philippines has filed a bill with its Senate that will increase the corporate tax rate of casinos. The bill’s plan to impose a fee on local customers will negatively affect Traffic, with Deutsche noting that charging locals entrance fee may negatively impact grind mkt, which accounts for large part of gaming industry. (News could be negative for Genting HK, which operates casinos in Philippines)