Genting SP

Genting SP: Over the past five trading days, Genting SP (GENS) has bought back 26.7m shares, representing 0.22% of total outstanding shares, at an average price of $1.06 per share. Shares bought back will be cancelled, which could aid in shoring up the group’s earnings per share (EPS) base. Under the GENS’ share buyback mandate, the group is allowed to purchase a maximum of 1.2b shares, or up to 10% of total outstanding shares, which would cost $1.3b based on current market price. GENS currently has $3.2b cash and $1.5b available-for-sale financial assets, while it has total bank borrowings of $1.8b coupled with perpetual securities holdings of $2.3b. This provides the group much leeway to continue its buyback program. According to a foreign broker, GENS should buy its shares below the $1.25 mark, as beyond that, the benefit of EPS accretion would be less meaningful when compared against the cash yield of GENS. From a chart perspective, the stock may have bottomed out at the psychological $1 support level. Initial resistance could be found at the $1.10 (50 day moving average), followed by a firmer cap at $1.20 in extension.