Genting shares to fall further as 2Q earnings crash 27%: Bloomberg

It’s the worst-performing stock on the city’s equity index.

Short-sellers are betting that Genting Singapore Plc (GENS), the worst-performing stock on the city’s benchmark equity index this year, has further to fall amid plunging earnings at Southeast Asia’s biggest casino operator.

According to a report by Bloomberg, bearish bets on the stock climbed to the highest level in a year as Genting tumbled 11 percent since it announced in August that second-quarter profit dropped 27 percent. Brokers from Mizuho Securities Co. to Macquarie Group Ltd. have cut their ratings on the company.

“Given the way earnings are being downgraded, it may be too early to buy the stock,” Alan Richardson, whose Samsung Asean Equity Fund outperformed 96 percent of peers tracked by Bloomberg during the past five years, said by phone from Hong Kong. “Genting is still trading at a premium over the Singapore stock market. Even if the shares fell another 20 percent, it will still be more or less trading at the market’s multiple.”

While most analysts recommend buying or holding Genting, the shares are currently trading at S$1.14, a 19 percent discount to the consensus price target. The stock is the sixth most-shorted on the benchmark Straits Times Index, according to Markit Group Ltd. data compiled by Bloomberg. Short interest climbed to 2.2 percent of freely-tradeable shares at the end of last week, the highest ratio since July 2013, the data show.

View the full report here.