Andrea Yeo
Fri, Oct 24, 2008
The New Paper
Impact on Marina Bay Sands unlikely
THEY say the house always wins.
But the recent global financial crisis is proving that it's not always true - even in the casino business.
The share value of some of the biggest casinos in the US - including Las Vegas Sands (LVS), the parent company of Marina Bay Sands - has plummeted by as much as 91 per cent.
But it's Sands' volatile fortunes that would be cause for concern to Singapore, given that the mega-integrated resort it is building at Marina Bay is one of few bright sparks on Singapore's cloudy economic horizon.
It is already in the process of recruiting 10,000 workers and has pledged that most of the jobs would go to Singaporeans.
Last Saturday, rgj.com (the Reno Gazette-Journal) in Northern Nevada reported that MGM Mirage, Las Vegas Sands and Boyd Gaming Corp were suffering heavy losses on the stock market.
Quoting gaming expert Bill Eadington, the director of the Institute for the Study of Gaming and Commercial Gaming at the University of Nevado in Reno, the paper noted that stock prices for the three reflected the downturn.
Yesterday, LVS was trading at US$12.86, a long way from its 52-week high of US$148.76. That's a 91 per cent drop in value.
Stocks of MGM and Boyd were listed as 'hold' in the Standard & Poor's stock recommendations on 11 Oct. But S&P rated LVS as 'sell' with two stars.
S&P said: 'We look for this company's long-term profit picture to be closely connected to the development of new casino projects and real estate in China and Singapore.
'In our view, the extent of possible development costs in those markets, questions about demand in those markets, and the possibility of regulatory change there add risk.'
Referring to the three major gaming houses in the US, Mr Eadington asked: 'You look at your share price; how else do you lose about 95 per cent of your value unless someone is really getting nervous?
'There is only 5 per cent to go and it is not a long way.'
Mr Bill Lerner, managing director and gaming and lodging analyst of Deutsche Bank Securities in Las Vegas, told rgj.com that he had received calls from serious investors concerned about bankruptcy risks for the three publicly-traded giants.
Said Mr Lerner: 'Public casino companies that have more relative debt, like Las Vegas Sands, like MGM, like Boyd, you take a look at the destruction of the value of those stocks and it is an indication that bankruptcy is where they may be headed.'
But he did not think any of the three will fall.
'It doesn't make any sense to me, but those are the types of questions we are getting from investors, the institutional smart investor.'
LVS responded to rgj.com by saying it did not comment or manage its business based on rumour or speculation.
LVS did not respond at press time about the impact of its parent company on the Marina Bay Sands IR project.
Staggered opening?
Ang Mo Kio GRC MP and deputy chairman for the Action Community for Entrepreneurship committee, Mr Inderjit Singh, said the IRs should not have any problem opening on time, although they might not open all their facilities at once.
He said: 'They may stagger the opening of their facilities instead of opening all at one time.
'The problem is the tourists might not be there so they may scale down their activities accordingly, and stagger the opening of facilities.'
Mr Curtis Montgomery, the chief executive officer of Wallstraits, an investor-related business, also felt Marina Bay Sands and Resorts World Sentosa would not delay their opening.
He said: 'My gut feel is that it (the financial crisis) won't have an impact at all because these two IRs have been getting strong support from the Government and from local and regional banks which are not so affected by the current crisis.
'And when Singapore wants things to work, they work.'
Resorts World Sentosa told The New Paper last night that they were on track to open in the first quarter of 2010.
Its assistant vice-president of communications, Mr Robin Goh, said they had not yet felt the effects of the financial crisis and would be hiring next year, six to nine months before opening, so they could begin training staff.
He said: 'We will also be hiring 10,000 staff members. Hiring has started now but only for managerial positions.'
He said of the 10,000 people, 60 per cent will be for Universal Studios Singapore and the casino.
He said the employees they will hire next year will be for all positions like croupiers, theme park operators, food and beverage, Mice (Meetings, Incentives, Conventions and Exhibition) and banqueting staff.
He added: 'Everything is still on track. We are still very optimistic.'
Fri, Oct 24, 2008
The New Paper
Impact on Marina Bay Sands unlikely
THEY say the house always wins.
But the recent global financial crisis is proving that it's not always true - even in the casino business.
The share value of some of the biggest casinos in the US - including Las Vegas Sands (LVS), the parent company of Marina Bay Sands - has plummeted by as much as 91 per cent.
But it's Sands' volatile fortunes that would be cause for concern to Singapore, given that the mega-integrated resort it is building at Marina Bay is one of few bright sparks on Singapore's cloudy economic horizon.
It is already in the process of recruiting 10,000 workers and has pledged that most of the jobs would go to Singaporeans.
Last Saturday, rgj.com (the Reno Gazette-Journal) in Northern Nevada reported that MGM Mirage, Las Vegas Sands and Boyd Gaming Corp were suffering heavy losses on the stock market.
Quoting gaming expert Bill Eadington, the director of the Institute for the Study of Gaming and Commercial Gaming at the University of Nevado in Reno, the paper noted that stock prices for the three reflected the downturn.
Yesterday, LVS was trading at US$12.86, a long way from its 52-week high of US$148.76. That's a 91 per cent drop in value.
Stocks of MGM and Boyd were listed as 'hold' in the Standard & Poor's stock recommendations on 11 Oct. But S&P rated LVS as 'sell' with two stars.
S&P said: 'We look for this company's long-term profit picture to be closely connected to the development of new casino projects and real estate in China and Singapore.
'In our view, the extent of possible development costs in those markets, questions about demand in those markets, and the possibility of regulatory change there add risk.'
Referring to the three major gaming houses in the US, Mr Eadington asked: 'You look at your share price; how else do you lose about 95 per cent of your value unless someone is really getting nervous?
'There is only 5 per cent to go and it is not a long way.'
Mr Bill Lerner, managing director and gaming and lodging analyst of Deutsche Bank Securities in Las Vegas, told rgj.com that he had received calls from serious investors concerned about bankruptcy risks for the three publicly-traded giants.
Said Mr Lerner: 'Public casino companies that have more relative debt, like Las Vegas Sands, like MGM, like Boyd, you take a look at the destruction of the value of those stocks and it is an indication that bankruptcy is where they may be headed.'
But he did not think any of the three will fall.
'It doesn't make any sense to me, but those are the types of questions we are getting from investors, the institutional smart investor.'
LVS responded to rgj.com by saying it did not comment or manage its business based on rumour or speculation.
LVS did not respond at press time about the impact of its parent company on the Marina Bay Sands IR project.
Staggered opening?
Ang Mo Kio GRC MP and deputy chairman for the Action Community for Entrepreneurship committee, Mr Inderjit Singh, said the IRs should not have any problem opening on time, although they might not open all their facilities at once.
He said: 'They may stagger the opening of their facilities instead of opening all at one time.
'The problem is the tourists might not be there so they may scale down their activities accordingly, and stagger the opening of facilities.'
Mr Curtis Montgomery, the chief executive officer of Wallstraits, an investor-related business, also felt Marina Bay Sands and Resorts World Sentosa would not delay their opening.
He said: 'My gut feel is that it (the financial crisis) won't have an impact at all because these two IRs have been getting strong support from the Government and from local and regional banks which are not so affected by the current crisis.
'And when Singapore wants things to work, they work.'
Resorts World Sentosa told The New Paper last night that they were on track to open in the first quarter of 2010.
Its assistant vice-president of communications, Mr Robin Goh, said they had not yet felt the effects of the financial crisis and would be hiring next year, six to nine months before opening, so they could begin training staff.
He said: 'We will also be hiring 10,000 staff members. Hiring has started now but only for managerial positions.'
He said of the 10,000 people, 60 per cent will be for Universal Studios Singapore and the casino.
He said the employees they will hire next year will be for all positions like croupiers, theme park operators, food and beverage, Mice (Meetings, Incentives, Conventions and Exhibition) and banqueting staff.
He added: 'Everything is still on track. We are still very optimistic.'
