Stock Downgraded: Genting price target reduced to 0.42 by ML

Merrill Lynch said it has cut its target price for Genting International PLC to 0.42 sgd from 0.43 to factor in the reduction in its estimated net asset value (NAV) to 0.27 sgd from 0.28 per share. The brokerage said it reduced its NAV estimate for the stock due to the change in the mark-to-market valuation of Genting's 29.8 pct holding in London Clubs, after London Clubs' share price fell from 1.36 stg to 1.28 last week on concerns that the planned takeover by Harrah's Entertainment announced in September might not proceed. However, Merrill Lynch said it is keeping its "buy" call on the stock on the view that Genting International could win the bid to build the proposed Sentosa integrated resort. "Our top pick remains Genting International, which we believe will not only submit the most comprehensive bid but will likely commit the largest financial investment of more than 2.5 bln usd," the brokerage said in a note. At 9.19 am, Genting International was up 0.02 sgd or 5.48 pct at 0.385 on volume of 7.12 mln shares.