Genting Singapore (SGX: G13) (OTCPK: GIGNY) shares are up 3.5% at midday in Singapore as the implications of last week's results announcement sink in. Those results were good, revenue up 60%, an 84% increase in gross profit to $601 million and so on. This was all announced late last week and it is taking a little time for the full implications to be absorbed by the market. Although it's also possible to think that a specific deal might have driven Monday's Genting price: “ a married deal was recorded in early trade. According to ShareInvestor data, the deal took place at 9am at S$1.13 at a volume of 11.7 million shares." If the big money is moving in then perhaps we should too?
As background Genting operates resorts and casinos in many locations. The big issue though is the one in Singapore itself, on Sentosa island. This is obviously a business which suffered badly from all of the covid related lockdowns. No international travel, little leisure travel of any kind and, of course, the economic dislocation of the process itself. The big question in investors' minds has been how and when will that business return? Indeed, will it return at all? Maybe we've all got out of the habit, maybe we're all desperate to get back out there? The same sort of question has been affecting the leisure airlines in Europe.
Genting Singapore share price from SGX
There's also a more specific issue here, which is the China business. As we all know lockdowns and travel restrictions have affected different countries at different times. Different strategies to deal with covid have led to that. In SE Asia of course a major determinant of business is what happens in China. There are, after all, 1.3 billion Chinese and their spending patterns are going to be determinative. So whether Chinese travel recovers is important for any leisure business within flying distance. Both in the sense of the ending of restrictions and also the more general economic impact which influences financing decisions about leisure.
Of course, it's possible for us to try to look at the Chinese economy through production numbers. But production always does equal consumption - our methods of calculating GDP depend upon that equality. So, if we're seeing rising leisure spend then e must also be able to divine rising production and GDP.
