Genting Singapore - Japan’s Extraordinary Diet Session extended by two weeks
- As highlighted as a possibility in our report yesterday, Japan's ruling parties decided last night to extend the current extraordinary Diet session by two weeks till 14 Dec, giving them enough time to pass bills on the Trans-Pacific Partnership as well as the pension system.
- Opposition parties, most notably the Democratic Party (DP), are likely to try to delay the passage of the unpopular pension bill in the lower house at today’s plenary session. If they are again unable to accomplish much traction with the ruling coalition, this may point to continued willingness on the part of the ruling parties to achieve their objectives at the expense of cooperation. Such an expedient forcing of bills would also leave more time for the deliberation of the casino bill – we will be closely monitoring the lower house calendar.
- Meanwhile, even though the largely anti-casino DP has previously blocked the deliberation of the casino bill, we are aware of a pro-casino faction within DP headed by Akihisa Nagashima. This faction has yesterday asked the chairman of the party’s executive committee to start political discussion on the casino bill within DP.
- Again, in light of binary political outcomes, we strongly advise investors to remain cautious when trading Genting Singapore (GS).
- Should the casino bill be placed up for deliberation in the next two weeks, we will likely to deem the odds of a potential casino license for GS to be significantly higher and will put our fair value under review.
- In the meantime, we maintain our SELL rating with fair value of S$0.75 on GS.