By ARTHUR SIM
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MANY stock market darlings have had their sparkle dulled by these rough times so it is almost thrilling to see a potential contender emerging.
Genting Singapore was listed on the Singapore Exchange in 2005 as a separate entity from its big cap Malaysian parent Genting Bhd. Not many wondered about the wisdom of this, and to be frank, few were interested.
There were some signs that Genting Singapore would be groomed to become a pure global casino play with UK gaming assets falling under its umbrella and its Singapore inte-grated resort in the works, but it was not a very compelling story - it may be the biggest casino player in the UK but the UK would hardly be considered a gaming capital, as would Singapore.
So, with the global recession and credit crunch coming at a most inopportune time, Genting Singapore was content to sit pretty.
This changed earlier this year when it was revealed that the Lim family - which controls Genting Bhd - sold a stake of about 9 per cent in Genting Singapore to raise $615 million. While the immediate question many asked was why the Lim family needed the cash, what was not so apparent was that the move had increased the public float of Genting Singapore significantly by about 900 million shares.
That the general market consensus was that there were no negative implications from the share sale and that Genting Singapore's share price resumed its rise after a retreat certainly suggest that investors are warming up to this ingenue.
This month alone, Genting Singapore's share price rose almost 20 per cent and continues to be actively traded.
With the announcement yesterday that Genting Singapore plans to raise as much as $1.63 billion in a rights issue that will be fully underwritten by eight banks, largely to 'pursue future strategic opportunities', there is no longer any need to speculate about the direction the company is intending to take - and the eight banks seem all for it.
With the rights issue, another two billion shares could be added to the public float. All Genting Singapore has to do now is to simply keep the momentum going. And as far as keeping market interests piqued, it seems to be doing this quite well already.
Last week, a simple report that said Genting Singapore could be completed ahead of schedule saw its share price climb almost 10 per cent in one day.
Genting Singapore has not said in detail how the $1.63 billion will be used except that 60 per cent will be used for 'strategic opportunities' with the balance used for working capital purposes.
It could be in Macau or new gaming jurisdictions of Japan or Taiwan that we next hear about Genting Singapore. With the gaming market expected to keep growing in Asia, it almost does not matter.
Ironically, the only loser in all this might be Genting Singapore's parent, Genting Bhd, as increasingly, emphasis shifts southwards. But then as anyone who gambles knows, you win some, you lose some.
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