Markets & Finance

Singapore Bets on Genting


Shares of the Malaysian outfit soared Monday after it snagged the rights to build a $5.2 billion gambling resort in the island republic

Move over Macau. It's now Singapore's turn to create some buzz in the global gambling business. On Dec. 11, the shares of Malaysia's Genting Berhad (GEBHY) shot up as high as 22% to 35.75 ringgit ($10.2) during trading in Kuala Lumpur after Singapore awarded the casino operator and entertainment concern the rights to build and operate a $5.2 billion gambling resort at Sentosa islands.

Sentosa is the second of the two casino resorts that Singapore will have ready by early 2010. In July, Singapore awarded Las Vegas Sands (LVS) the rights to build a $5.6 billion casino resort at Marina Bay, next to the central business district. "Marina Bay is world's most expensive casino development and Sentosa is second biggest in the world," says Sean Monaghan, an analyst for Merrill Lynch in Singapore.

Though it doesn't aspire to rival Macau as the global gaming center, the Southeast Asian island-republic is keen to position itself as the playground for Asian tourists, luring well heeled gamblers from China, India and Southeast Asia to its shores.

Genting will build a $5.2 billion casino by the end of 2010 and is targeting 10 million tourists by 2015. It expects to generate the equivalent of 0.8% of Singapore's GDP in economic activity and create 30,000 jobs once the casino gets up and running. The resort includes a Universal Studios theme park – expected to be world's biggest - 22 attractions as well as an "ocean-arium." The resort will also build six hotels to accommodate gamblers and their families.

The group's Singapore-listed Genting International arm (which also owns London's biggest gaming company Stanley Leisure) will own 75% of the Sentosa casino resort. Meanwhile, another group company, Hong Kong-listed Star Cruises (SSKZF), will own the rest. Kuala Lumpur-based Genting Berhad runs Malaysia's only and Southeast Asia's biggest casino.

Assif Shameen covers Southeast Asia for BusinessWeek.com from Singapore.

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