Maybank Kim Eng downgraded Genting Singapore to Hold from Buy after Japan’s Yokohama elected a new mayor, Takeharu Yamanaka, who is adamantly opposed to building an integrated casino resort (IR) there.
“This almost certainly means that the Yokohama IR RFP [request for proposal] process will be shelved. Though we still opine that the GENS-Sega Sammy JV [joint venture] was in the strongest position to win a Yokohama IR license, it is likely all academic now,” the brokerage said in a note Sunday.
Yamanaka had previously described casinos as “poison apples,” and had pledged to immediately withdraw the integrated resort bid, the brokerage said.
Maybank Kim Eng removed the imputed S$0.30 a share contribution it had calculated into its target price, which it cut to S$0.86 from S$1.16 previously.
But the note added the previous call on the stock was a tactical Buy.
“In our view, there was little downside risk as we gather that the market had not imputed any upside potential from a Yokohama IR,” the note said.
Shares of Genting Singapore fell 1.86 percent to S$0.79 by 10:33 a.m. SGT.