Las Vegas Sands (LVS) will report on Wednesday night after the close of trade in the US stock markets. Singapore equity followers will have a first read on how good, or bad the local gaming sector has been this past quarter. Earnings reports from LVS offer an insight into their Marina Bay Sands (MBS) Singapore operations. During past releases, disclosures there have also influenced the trading of Genting Singapore shares, as industry updates for the quarter were assessed. Genting’s shares, at S$1.025, have picked up roughly 10% since the start of the month, bouncing off the fresh four-year lows of last month, of S$0.91. In February, Genting was sold down over concerns that their ballooning receivables may lead to considerable write offs, hence putting a strain on their bottom line. A major concern was the fact that the receivables had stemmed largely from credit extended to their high-rolling customer segment.
Writing off debt?
This increases the prospect of their having to write off lumpy, uncollected debt that may have been concentrated on only a few premium players; a gamble most gaming operators often choose to avoid. In either case, the stock’s equally aggressive rebound may be related to bargain hunters coming in to take a stab at prices sitting at a four-year low. From the chart below, we see several gaps that were formed in the volatility over this past month. One sits between S$1.045 and S$0.995 and the other between S$0.975 and S$0.985. This looks somewhat like an island reversal; one which has often proven to be a strong reversal signal. This may offer the stock support for a further bounce from here. S$1.05 remains a key resistance level that has to be broken convincingly before this can be confirmed. If the stock fails to punch through the S$1.05 level, however, we may see it fall back close the S$0.975 gap instead.
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