Genting Malaysia, Genting Bhd shares rally on likely Miami property exit

Genting Malaysia, Genting Bhd shares rally on likely Miami property exit

Group stands to reap huge profit, says Maybank Investment Bank Bhd.

Genting Malaysia Bhd and Genting Bhd’s shares have rallied following news of their potential exit from the Miami property market with big gains. (miamigov.com pic)
PETALING JAYA:
Genting Bhd and Genting Malaysia Bhd’s shares rallied in early trade today following the group’s possible exit from the Miami property market with big gains.

At 10.05am, Genting and Genting Malaysia grew six sen to RM4.56 and five sen to RM2.60 respectively.

Maybank Investment Bank Bhd said Genting Malaysia is likely to exit the Miami property market with a whopping profit after entering it more than a decade ago.

The company could recognise a gain on disposal of about RM2.9 billion, assuming the waterfront is sold for US$1 billion.

“Yet, we do not expect Genting Malaysia to declare special dividends,” it said in a note today.

It was reported that Genting Malaysia’s property in Miami, Florida has attracted five offers, with the highest bid being just under US$1.5 billion.

Genting Malaysia plans to make a final decision in the coming weeks.

“Recall that Genting Malaysia had invested US$500 million throughout May and September 2011 to acquire the aforesaid property. Note that the ringgit was trading at only RM3.00:US$1 then versus RM4.43:US$1 currently,” it noted.

Maybank Investment said it was maintaining earnings estimates, a buy call, and a RM2.97 target price on Genting Malaysia pending the finalisation of the property sale.

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