Nomura Securities Declares That The Worst Is Over For Genting Malaysia

I was reading the following article posted on the Edge.

• Worst over for Genting Malaysia?
  Written by Nomura Securities Research
  Thursday, 15 July 2010 14:34
  
  KUALA LUMPUR: Nomura Securities Research Malaysia says the worst is over for Genting Malaysia (GentingM) after the recent sell down and downgrades by the market.
  
  "We believe that all the bad news has been priced in. Fundamentally, we see earnings upgrades as the key catalyst going forward," it said on Thursday, July 15.
  
  Trading at 4x FY11F EV/EBITDA, the research house said GentingM looked appealing on a risk-reward basis. Its proposed acquisitions of UK and US casinos will exhaust most of its cash, removing the overhang of concern on its plan for its huge cash reserves. Upgrade to BUY; target price RM3.70.
  
  The consensus earnings upgrades post 2Q10 earnings, scheduled to be released in August 2010, would likely trigger a re-rating of the stock.
  
  GentingM offers investors good exposure to the strong and rising domestic consumption story. Competition for its mass market business is likely to be shortlived. Its domestic operation should continue to generate strong cash flows.
  
  Nomura Research said GentingM’s latest move, of proposing to spend most of its cash reserves on two acquisitions, confirmed its view that paying out its cash reserves in the form of higher dividends was the last thing it was contemplating.
  
  The research house said after a series of downgrades by the Street attaching zero value to its cash reserves, there is nothing much left for the market to discount. The latest move also helped remove an overhang on its intention for its cash reserves. (source: here )

Hmmm... do indulge in me while I talk to myself. :D

Hey if you are interested, you are more than welcomed to listen to my private talk.

• Nomura Securities Research Malaysia says the worst is over for Genting Malaysia (GentingM) after the recent sell down and downgrades by the market.
  
  "We believe that all the bad news has been priced in. Fundamentally, we see earnings upgrades as the key catalyst going forward," it said on Thursday, July 15

All the bad news have been priced in.

Let's see... Genting Malaysia on 1st July ended the day trading at 2.74. Then the next day, Genting Malaysia's UN Fortunate Entry Into UK Casino Business.

Genting Malaysia lost 12 sen to close at 2.62. Genting Malaysia yesterday closed at 2.68.

So this means 'all the bad news have been priced in'? Hmm... so the WORST is over?

Is it?

And I see Nomura Securities Research Malaysia acknowledges that this is BAD NEWS.

• Its proposed acquisitions of UK and US casinos will exhaust most of its cash, removing the overhang of concern on its plan for its huge cash reserves.

LOL!

I fell off my chair. Really. :P

Removing the overhang concern in regards to Genting Malaysia's huge cash reserves???

Oh.... OK... OK... OK...

Having huge cash reserves causes overhang concerns.

Ditto that. :D

• Nomura Research said GentingM’s latest move, of proposing to spend most of its cash reserves on two acquisitions, confirmed its view that paying out its cash reserves in the form of higher dividends was the last thing it was contemplating.

Hmmm.... so Nomura says.... paying shareholders in the form of higher dividends was THE LAST THING Genting Malaysia is contemplating eh?

It rather spend most of its cash reserves on acquiring companies that its major shareholder owns a huge stake, eh? Spending most of its cash reserves on related party transactions is good eh?

LOL!

• The research house said after a series of downgrades by the Street attaching zero value to its cash reserves, there is nothing much left for the market to discount. The latest move also helped remove an overhang on its intention for its cash reserves.

LOL!

Yeah... what is else there to discount?

Since there is nothing else to discount... LOL!... best thing to do is... BUY! BUY! BUY!

hmmm..... :D

ps: I am merely talking to myself. :D