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Good news for retailers
Jo-ann Huang
joannhuang@mediacorp.com.sg
SINGAPORE
With a higher yuan, Singapore will be a less costly tourist destination for the Chinese, said Mr Liu Jinshu, investment analyst at Sias Research.
“Chinese tourists already accounted for 9.7 per cent of total arrivals in 2009. With a stronger yuan, we can expect more visitors from China,” he said.
About 72,000 Chinese tourists touched down on Singapore shores in May, making them the fourth-largest country in terms of visitor arrivals.
The top three countries in terms of tourist arrivals in May are Indonesia with 186,000 visitors; India with 116,000 visitors; Malaysia with 82,000 visitors and Australia taking fifth place with 64,000 visitors.
Mr Liu said with most visitors coming from Asia, the European debt crisis is not yet a mounting concern.
“The euro zone debt crisis will have a relatively smaller impact on Singapore retail trade as a whole,” he said.
“Hence, our retailers are less reliant on European customers.
Reduced takings from them will probably be more than offset by higher receipts from other nationalities and local spending,” he continued.
With the Singapore economy hitting 15.5-per-cent growth on-year in the first quarter, retail sales excluding motor vehicles grew only 7.4 per cent in the same period.
But Mr Liu is sanguine on the retail sector for the second half of this year, despite a slower performance compared to broad economic growth.
“I believe that consumption will increase towards the end of 2010, as employers become more willing to increase wages and bonuses in view of what I expect to be stronger profit numbers for 2010,” said Mr Liu.
Ms Sng Ngoi May, chairwoman from the Orchard Business Association, said retailers are cautiously optimistic as the global economy undergoes a patchy recovery and effects from the Integrated Resorts are only beginning to seep in.
However, with rising operation costs, retailers are also looking at thinner margins, said Ms Lau Chuen Wei of the Singapore Retailers Association.
“Singapore has moved up a rung in global retail rents ranking to be the 17th most expensive city in the world, even though more retail space has been added to Singapore stock,” she said.
Labour costs are also set to increase with foreign manpower regulations tightening.
“As these two cost components make up a good 70 per cent of a retailer’s operating costs, it is unlikely that profit margins will rise any time soon, even if top line sales figures show an upward trend,” she added.
She maintains that retailers have to remain innovative in an increasingly competitive market and relook manpower strategies to minimise costs.
— Singapore retailers can look forward to higher expenditure from an influx of Chinese tourists. That is if policy-makers decide to tighten the yuan, said analysts.Chinese tourists already accounted for 9.7 per cent of total arrivals in 2009.
Mr Liu Jinshu, investment
analyst at Sias Research
With a stronger yuan, we can expect more visitors from China.
Forget about this counter.Wait for opportunity ONLY.
We should move on to other counters.
freshmind ( Date: 05-Jul-2010 11:16) Posted:
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freshmind ( Date: 05-Jul-2010 11:16) Posted:
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freshmind ( Date: 05-Jul-2010 11:16) Posted:
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Genting Sp divest its entire UK casino operation for S$688.8m
Book an excess over book value of around S$103m
Can anyone pl. explain "it will also recognize a non-cash
exchang translation loss of S$338.8m". Kam siah (thank you)
pharoah88 ( Date: 05-Jul-2010 09:05) Posted:
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Most companies alway project or show nice numbers
in their financial reports.Sorry I cannot quote the co.
here. You check it out.
alooloo ( Date: 05-Jul-2010 09:05) Posted:
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AnthonyTan ( Date: 05-Jul-2010 09:23) Posted:
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BY MORGAN STANLEY RESEARCH ASIA/PACIFIC
Genting Sp is the most expensive stock in gaming coverage
universe (16X2011e EV/EBITDA)
Yet ppls are buying, why??????
For the future?????? no body can tell, float or sink
pharoah88 ( Date: 05-Jul-2010 09:05) Posted:
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Summary: Genting Singapore (GS) has entered into a conditional sale and purchase agreement to divest its entire UK casino operations for £340m (or S$688.8m). If the proposed divestment is completed, GS will receive net proceeds of ~S$688.8m and will book an excess over book value of around S$103.6m. However, it will also recognize a non-cash exchange translation loss of ~S$338.8m. But we are not overly concerned as we view the sale as an exceptional item; we also agree with management’s intention to focus its energy on RWS and also opportunities in the region, as gaming here is still likely to experience good growth prospects. Assuming the deal is completed, we expect it to reduce our FY10 sales estimate by 24% but increase our net profit estimate by 13% as margins would improve ex-UK operations. As we also believe that GS is likely to spend less in capex without its UK operations, our DCF-based fair value rises from S$1.29 to S$1.34. Maintain BUY. (Carey Wong)
You're right up to now...
But you can't stop them use the number to project good EPS for FY10....
I calculated... it can be as good as 12 cents EPS.... for FY10... if they use the 6mil to offset first quarter loss.
AnthonyTan ( Date: 04-Jul-2010 13:06) Posted:
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Genting Sp is the most expensive stock in
gaming coverage universe (16X2011e EV/EBITDA )
Genting Sp sold it UK casino business to Genting
Malaysia for S$697 million.In 2006, Genting Sp bought
the UK casino business at a price of S$1.861 billion - thus
the value lost was S$1.17 billion. The point is they see
potential when they buy the business. Likewise, there is no
sure profit for any new ventures.
On Friday, Genting had a huge selling down and closed at $1.16 with high volume of 0.19 billion shares traded.
An engulfing bearish line occurred (where a black candle’s real body completely contains the previous white candle’s real body). The engulfing bearish pattern is bearish during an uptrend which signifies that the momentum may be shifting from the bulls to the bears.
Both RSI & MACD are turning bearish as RSI did a sharp down tick on Friday.
Important Resistance of Genting: $1.21
Immediate Support of Genting: $1.16
Profit taking seems to have started on Friday on heavy volume after the news announcement.
It is impossible to buy now since the price has soared way above the moving averages.
SEE CHART & ANALYSIS FOR DBS
If vested, we would monitor if prices could be hold onto the technical/ 20days MA support at $1.12. Do consider to take profit once that support beached.
A question in my mind, hope some of the expert here can help:
1) Would like to ask, can they use the cash retrieved from the transaction ($600+ mil) to reflect as Part of Net profit calculation in balancesheet?
2) If the answer to first question is yes, i think this year it is possible to report >10cents per share EPS.
600mil = around 5-6 cents per share
Q1'10 EPS = -3 cents?
if Q1 don't have the 400 mil impairment loss, then EPS for 1.5 months is around 1-2cents EPS. So Q2 - Q4 EPS expect 3-4 cents each quarter...
Total FY10, 12 cents EPS???
The sale of Genting UK from Genting sp to Genting Malaysia may mainly for group strategic purposes where:-
to reduce the burden of balance sheet under genting sp;
to serve tax deduction purpose for Genting Malaysia for absorting the annual losses of Genting UK (Malaysia government has announced the increase the betting tax same day as Genting sp annouced to sell Genting UK to Genting Malaysia); and
may be to enable Genting sp has extra funds to pay back to the key shareholders i.e. Genting Bhd via certain financial tools as Genting Bhd has loaned for subcripted a big number of rights from Genting sp before.
For retail buyers who just bought blindly and madly must watch out the trap of BBs because it doesn't serve much advantage to small investors in short term because Genting Singapore still bear a BIG amount of investment and operation costs!