BUSINESS
Increasing competition
affects Genting M’sia
KUCHING: The gaming
sector in the region is
registering increasing
competition with Marina
Bay Sands (MBS) entering
the Singaporean gaming
market, affecting Malaysian
shores as Genting Malaysia
takes a hit.
RHB Research Institute
Sdn Bhd (RHB Research) in
its research report
yesterday projected a
decline in Malaysia’s visitor
arrivals in the financial year
2010 (FY10) of four per cent
year-on year (y-o-y), coming
from some cannibalisation
caused by Singaporean
integrated resorts (IRs).
Nonetheless, the research
firm insisted that the impact
was expected to be minimal
and short term given that 73
per cent of the visitors to
Genting Malaysia Bhd
(Genting Malaysia) were
locals and day-trippers.
RHB Research continued
to predict a two per cent per
annum y-o-y recovery in
visitor arrivals for the
financial years 2011 and
2012.
This year, some
cannibalisation was seen in
the months of April and
May, noted the research
report, highlighting a slight
dip in the grind market since
mid-April although a growth
was seen in the VIP market
during the same period.
Going forward,
management expected the
Valuation matrix of Berjaya Sports Toto for 2008A-2012F
Source: ECM Libra
Berjaya Sports Toto to benefit from
legalisation of sports betting
KUCHING: Berjaya Sports
Toto Bhd (Berjaya Sports
Toto) is set to benefit from
the legalisation of sports
betting as part of sister
company, Ascot Sport’s
rollout plan to introduce
sports betting to 220 of its
681 outlets.
According to ECM Libra
Capital Sdn Bhd (ECM
Libra), it expected sports
betting punters who were
not regular number
forecast operator (NFO)
punters to bet on not only
sports but mainstay NFO
games.
It added Berjaya Sports
Toto should experience
revenue growth despite the
lack of an operating record.
To recap, the research
house said higher
lotto revenue also led to
higher non-lotto (4D, 5D
and 6D) revenue due to
higher jackpots driving
more visitations to outlets
where more punters spent
on both lotto and non-lotto
games.
Furthermore, it expected
more visitations to outlets
driven by sports betting to
also lead to higher non
sports-betting revenue.
The research firm
collated and analysed NFO
industry statistics from
1998 onwards to study the
effects the previous two
World Cups had on the
industry.
Friday, June 4, 2010
TOURIST ATTRACTION: First World Hotel, one of Genting Malaysia’s many hotels in Genting Highlands. The
research house was expecting the overall Genting group to benefit from Genting Malaysia, contributing 40 to 45 per
cent to overall earnings.
VIP business to continue
growing at a faster pace than
the grind market in FY10, as
it understood that
Singaporean newcomer
Marina Bay Sands (MBS)
was aggressively fighting
for grind market shares
from Malaysians.
Singapore’s gaming
market faced a dilemma as
to whether the market was
large enough to support two
players who have spent a
significant amount of money
on their IRs, according to
RHB Research.
The 2002 World Cup
which was held in South
Korea and Japan saw the
NFO industry contract by
three per cent.
A number of reasons
were mooted for this,
namely the 2002 World Cup
was effectively held in a
region where the time
zones were the same as
Malaysia and hence, a
greater shift to illegal
sports betting was
observed.
Moreover, in July and
August 2002, there was a
nationwide exercise to
deport foreign workers out
of the country which led to
lower revenues since this
segment of punters
constituted five to 10 per
cent of outlet visits.
ECM Libra also
considered the array of
negative regulatory
changes (in the form of
higher taxes) to the NFO
industry during that
period of time to be a factor
as the NFO operators had
to reduce prize payouts in
order to maintain margins.
This provided illegal
NFO and sports betting
operators the opportunity
to wrest market share with
their higher prize payouts,
according to the research
house.
Comparatively, the 2006
World Cup was different
with the NFO industry
B11
Las Vegas Sands (LVS)
believed this would not be a
problem as the market size
was expected to reach at
least US$4 billion by 2012
based on a 50:50 split for the
VIP and mass market, more
so should Genting Singapore
succeed in bringing junket
operators to its casino.
The research house
expected the overall Genting
group to benefit from
Genting Malaysia,
contributing 40 to 45 per cent
to overall earnings while
Genting Singapore chipped
expanding by six per cent.
The reasons for this was
that the 2006 World Cup
was held in Germany,
which was in a different
time zone and led to a lot of
sports betting punters not
being interested in betting
on matches they could not
watch during normal
working hours.
Moreover, the second
half of 2006 coincided with
the commodities/palm oil
‘boom’ which had
employers demanding
more foreign workers.
This led to the relevant
segment of clientele
maintaining their
contribution to overall
revenue.
ECM Libra also noted
that legal NFO operators
wrested market share
away from their illegal
counterparts since they
could afford to offer higher
prize payouts driven by
lower statutory charges
and new games.
Thus, for this year’s
World Cup, the research
firm expected NFO
operators to hold their own
against the illegal NFO and
sports betting operators.
It stated Berjaya Sports
Toto’s target price at RM4.91
per share premised on 1.5
per cent terminal growth
rate and 7.9 per cent
weighted average cost of
capital.
in 30 to 35 per cent, power
and oil and gas divisions by
five to 10 per cent,
and plantation and
property divisions by 10 to
15 per cent.
The research house
continued to peg Genting
Malaysia at RM2.90 per
share, taking into account
the weak investor sentiment
surrounding the stock due
to corporate government
risk and the lack of
additional capital
management from its
abundant cash hoard.
Mukhriz: M’sia
to draw up FTA
framework with
GCC countries
KUALA LUMPUR:
Malaysia hopes to draw up a
framework for Free Trade
Agreement (FTA) with the
Gulf Cooperation Council
(GCC) countries by October,
said International Trade
and Industry Deputy
Minister Datuk Mukhriz
Mahathir.
“GCC Secretary-General
Abdul Rahman Hamad al-
Attiyah had indicated that
he may be in town (Kuala
Lumpur) this October. So,
we hope to sign (the
framework) then after
which we will discuss
the next course of work,” he
told reporters after opening
the Malaysia
Chamber of Commerce here
yesterday.
Korea
Mukhriz met Abdul
Rahman in Singapore last
week to discuss the
possibility of establishing a
FTA between Malaysia and
GCC.
Asked on the progress
made so far, he said,
“They are very keen. He
explained economic
ministers are very
committed (to establishing
the FTA) but it is the finance
ministers of the GCC
countries who will decide
on this.”
He said at present, there
was a moratorium,
whereby, GCC has to
complete negotiations with
countries they have already
initiated talks with like
Europe and the United
States. — Bernama
NBAD to reap benefits of economic recovery
KUCHING: The National
Bank of Abu Dhabi PJSC
(NBAD) is set to play a major
role in reviving the UAE’s
economy over the next few
years given the substantial
infrastructure spending
centred in Abu Dhabi.
Being the second-largest
bank in the United Arab
Emirates (UAE), established
in 1968 by the government of
Abu Dhabi to serve as
the banker to the Emirate
of Abu Dhabi, RAM
Rating Services Bhd (RAM
Rating) observed that
it was well poised to reap
the benefits from the
Looi Kien Leong
M’sian takes top seat in
WITSA for second term
KUCHING: Datuk Dan E
Khoo has been re-elected as
the chairman of World
Information Technology
and Services Alliance
(WITSA) for a second term.
In a latest statement
released by National
Information and Communi-
cation Technology (ICT)
Association Of Malaysia
(Pikom), Khoo would be
serving the alliance, which
is a consortium of 70 IT
industry associations from
economies around the
world, until May 20, 2012.
The second successive term
as WITSA’s chairman
marked the latest in Khoo’s
20-year career in IT and media
industries, throughout which
he had played leading roles
in various organisations
related to the field. Currently,
he sits as the vice president of
business strategy and
transformation at
Multimedia Development
Corporation (MDeC).
During his first term,
Khoo was credited for the
transformation of WITSA’s
status as a functional body,
strengthening its core
capabilities to meet
functional needs.
He was instrumental in
the successful organisation
of WITSA’s 16th World
Congress on Information
Technology 2008, held in
Kuala Lumpur in May 2008,
which raised over US$11
million in sponsorships.
Malaysia keen to woo more South
Korean investments, says Mukhriz
KUALA LUMPUR:
Malaysia is keen to woo
more South Korean
investments in various
sectors, particularly in
green technology, says
International Trade and
Industry Deputy Minister
Datuk Mukhriz Mahathir.
“We are very keen to
attract South Korean
business to trade and invest
in Malaysia. Our particular
interest is in green
technology,” he told
reporters after launching
Malaysia-Korea Chamber
of Commerce here
yesterday.
Mukhriz said there were
South Korean electronic and
electrical companies that
have established strong
brands and were well-
known globally.
“We want to see these
companies expand here and
hope to see them reinvest in
higher technologies.” he
said.
Earlier, in his keynote
address, Mukhriz said
South Korean investments
economic recovery,
underscored by its solid
credit profile.
Therefore, RAM Rating
had assigned respective long
and short-term financial
institution ratings of AAA
and P1 to NBAD.
Concurrently, NBAD’s
proposed up to RM3 billion
senior unsecured Islamic/
conventional medium-term
notes programme had been
assigned a long-term issue
rating of AAA.
According to RAM Rating,
the government’s
investment arm, Abu Dhabi
Investment Council, owns 70
David Wong
The trust is based on a clear vision as to where we
want to take WITSA. We have delivered our
promise. Apart from the trade mission, WITSA’s
other global trade initiatives will include the
opening of 14 business centres in nine countries as
well as the Global Trade Portal.
Datuk Dan E Khoo, WITSA chairman
Commenting on his re-
election into WITSA, Khoo
outlined plans to take the
consortium further by
making it a globally
respected, enriching and
authoritative trailblazer for
the IT industry.
“The trust is based on a
clear vision as to where we
want to take WITSA. We
have delivered our
promise,” he said.
“Apart from the trade
mission, WITSA’s other
global trade initiatives will
include the opening of 14
business centres in nine
countries as well as the
Global Trade Portal.”
At the same time, Khoo
disclosed that the
consortium would lay out
new proposals that include
having a WITSA Digital
Economic Index, whereby 74
countries would be ranked
according to a set of
indicators, in terms of their
digital economy.
“It’s also going to propose
the WITSA Digital National
Datuk Mukhriz Mahathir
have grown steadily since
the 1980s.
Malaysia’s trade with
South Korea was on an
upward trend for five
consecutive years from
2004 to 2008, growing at
6.7 per cent a year, from
US$9.7 billion in 2004 to
US$15.4 billion in 2008, he
said.
Last year, however,
bilateral trade dwindled to
US$11.7 billion, a direct
per cent of NBAD. As its
lending arm, NBAD had a
leading position in
financing government-
related businesses and a
prominent share of public-
sector deposits.
The rating agency said as
at end-December 2009, the
bank had a 13 per cent share
of the UAE financial
system’s loans and 12 per
cent of its deposits. In
addition, the bank had a
presence in 12 other
countries, with Egypt
housing its biggest overseas
operation.
RAM Rating stated that the
Datuk Dan E Khoo
Blueprint for countries
without a proper ICT
structure to enter the digital
economy,” he added.
Apart from Khoo, WITSA
also appointed two other
Malaysians into top posts
within WITSA. Looi Kien
Leong will be on the
consortium’s board for the
same two-year period. As
with Khoo, Looi serves
Pikom as an advisor and is
the president of the Asian-
Oceanian Computing
Industry Organisation.
In addition, Pikom’s
immediate past chairman
David Wong was appointed
to chair the Global Trade
Committee to spearhead ICT
trade among member
economies of WITSA.
In its statement, Pikom
commended the
appointments of these three
Malaysians, adding that it
signified the country’s
capability to attain world-
standards in executive
leadership pertaining to the
global ICT sector.
impact of the global
economic crisis.
Mukhriz said it was
heartening to note that
Malaysia’s trade with South
Korea recovered
significantly in the first
quarter of this year,
recording a 32.1 per cent
increase compared with the
same period in 2009.
He said South Korea was
Malaysia’s sixth largest
trading partner.
Malaysia’s main exports
to South Korea are liquefied
natural gas, electrical and
electronic products, iron
and steel products,
chemicals and chemical
products.
He said South Korea was
also Malaysia’s seventh
largest investor since 2006,
with 287 implemented
manufacturing projects
worth US$2.62 billion.
Based on Bank Negara
Malaysia’s data, he said,
Malaysia’s investments in
South Korea was US$4
million last year and US$17.4
million in 2008. — Bernama
bank chalked up a
respectable pre-tax profit of
AED3.09 billion the in
financial year ended (FYE)
December 31, 2009 despite
heftier provisions for the
year. This translated into a
return on equity (ROE) of
17.78 per cent and a return on
assets (ROA) of 1.71 per cent.
The rating agency
reported that in the three
months ended March 2010,
the bank garnered AED1.05
billion in pre-tax profits,
reflecting improved
annualised ROE and ROA of
20.11 per cent and 2.12 per
cent respectively.