Escalating forex woes derail Genting's mass-market growth dreams

There will be absolutely no growth in FY16.

The dwindling number of high-rolling gamblers has pushed Genting to lay its chips on its mass-market operations. However, analysts caution that this growth strategy will be foiled by the sharp depreciation of ASEAN currencies in recent months.

DBS estimates that Genting's mass-market hold rate will post zero growth in 2016, as the weak Indonesian rupiah and Malaysian ringgit "could significantly curtail" the number of customers to Genting's properties.

Apart from the forex threat, DBS cautioned that Genting's earnings momentum will remain weak due to the slowing VIP market and its ongoing scaledown of its VIP business.

“While the near term outlook is challenging, GENS remains in a strong financial position with net cash of cS$2.8bn. Thus, it is well positioned to take advantage of new casino markets or to conduct share buy backs to temper any share price declines,” DBS said.