GENTING trade ideas
GENTING & GENM: Got Hit by Increased of Gaming TaxThe announced Budget for 2019 include increase in gaming tax for casino from 25% to 35%. The last increase in gaming tax for casino was in 1998. In an article in 2016, The Edge entitled "Is Gaming Tax Next to Go Up" an analyst from HLIB opined that a 1%-increase in gaming tax will lower earnings by3% for GENM and 1% for Genting. Thus it is not unreasonable to project that the proposed 10%-increase will lead to a 30%-drop in earnings for GENM and 10% for Genting.
The drop in share price for Genting from RM7.20 to an intra-day low of RM6.35 is about 12%. That nearly mirrors the expected decline in earning of 10%. Its immediate support is at RM6.50.
The trading of these 2 stocks will be very volatile in the next 1-2 days. If you are looking to invest for long-term, you can do so gradually. This huge increase in gaming tax took 20 years to land. It will take another 20 years for the next increase to take place. Thus, this may be a good opportunity to buy into a good growth stock. I believe either one of these stocks are good. However the bigger bang may come from GenM since its Genting Integrated Tourism Plan is expected to be completed in 1H2019 (including the Twentieth Century Fox Theme Park which will be ready in 2Q2019). Good luck.
Avoid Stock with Weak Background – Genting Berhad (3182.KL)Based on the daily chart above, the re-distribution stage is spotted on 20 August 2018 when Bullish HeatZone turned to Bearish HeatZone. This is the early signal of potential selling by the Smart Money and this is confirmed by another exit signal on 3 September 2018 when the price broke below ATR Stop Loss. The early exit signal by detecting the hidden selling can avoid a loss of -19%.
Notice how stage 4 (mark-down) is formed after price broke below ATR Stop Loss with further confirmation on the Sell-Off bars as shown in the chart above. Smart money trap weak-hand holders again on 2 November 2018 by marking up the price with high volume and continue the distribution forcing the price close at the low or below support.
Disclaimer
This information only serves as reference information and does not constitute a buy or sell call. Conduct your own research and assessment before deciding to buy or sell any stock.
