KUALA LUMPUR (Aug 9): Genting Bhd and Genting Malaysia Bhd's (GenM) share prices jumped in Bursa Malaysia morning trade today after Prime Minister Tan Sri Muhyiddin Yassin announced yesterday Malaysia's proposed relaxation of some Covid-19 pandemic-driven movement restrictions for fully vaccinated people in states that have moved into Phase 2 of the National Recovery Plan (NRP) and beyond starting from tomorrow (Aug 10).

At the end of today's trading session, Genting Bhd’s share price had risen 18 sen or 3.96% to RM4.73, while GenM was traded 11 sen or 4.06% higher at RM2.82, as investors weighed such positive sentiment on the casino and hotel operator’s business.

Genting Bhd owns a 49.5% stake in GenM, according to Genting Bhd’s website.

It was reported yesterday that states in Phase 2 of the NPR are Penang, Perak, Pahang, Terengganu, Kelantan and Sabah. Meanwhile, Perlis, Labuan and Sarawak are already in Phase 3, according to news reports.

Labuan is a federal territory.

News reports, quoting Muhyiddin, reported that Malaysia will relax some Covid-19-driven movement restrictions for fully vaccinated people in the eight states that have met the criteria, such as reduced case numbers and higher vaccination rates.

The measures, which will allow dining in at restaurants, outdoor individual sports and interstate tourism, will take effect tomorrow, Muhyiddin was quoted as saying in a televised address yesterday,

"I understand many are tired of the pandemic or are dealing with pandemic fatigue," he added.

Today, Genting Bhd and GenM's share prices are closely watched against the broader market as analysts evaluate the performance of Malaysian stocks against factors including the country’s Covid-19 situation.

Genting Bhd and GenM, which are both constituents of the 30-stock FBM KLCI, are also members of Bursa’s Consumer Products and Services Index.

The FBM KLCI was 6.93 points or 0.47% higher at 1,496.73, partly helped by Genting Bhd and GenM’s share price rise.

The Consumer Products and Services Index ended the trading day up 1% or 5.84 points at 588.02, the second highest in percentage terms among Bursa’s 30 gauges.

Public Investment Bank Bhd’s research team in a note today lowered its end-2021 KLCI closing target to 1,590 points from 1,690 previously due to a higher risk premium.

"The local bourse is sliding down a slippery slope, seemingly unable to break its fall. Investor interest is waning, while foreign investors have continued to be net sellers. Why? We previously suggested that it could have been pandemic-driven given the sharp spike in daily [Covid-19] cases. While that may very well still be the case given the record-high numbers clocked in over the last two to three days, the very rapid rate of vaccination should see that number ease off in the coming weeks. Yet, the market has continued to be weighed by a deep sense of uncertainty — due to politics perhaps?

"In recent days, Muhyiddin had to come out to defend his position in the face of widespread calls for his resignation, while also saying the legitimacy of his leadership will be put to the test in the September parliamentary sitting.

“[The KLCI’s] earnings growth momentum, albeit affected slightly by recent Covid-19-driven lockdown measures, remains largely intact," said the research team, indicating a target price (TP) of RM6.26 for Genting Bhd and RM3.43 for GenM.

According to Public Investment Bank’s note, Genting Bhd and GenM’s weightage in the KLCI stood at 2.2% and 1.6% respectively.

Meanwhile, Genting Bhd’s share price at RM4.73 valued the company at about RM18.33 billion based on the company’s number of issued shares at 3.85 billion.

Over the past one year, Genting Bhd’s share price had risen to current levels from the closing price of RM2.99 on Nov 9, 2020 as investors weighed the impact of pandemic-driven movement restrictions on the group’s businesses, which include oil palm plantation operations.

On the other hand, GenM’s share price at RM2.82 gave the company a market capitalisation of about RM16.75 billion based on the company’s number of issued shares at 5.65 billion. 

Over the past one year, GenM's share price had risen to current levels from the closing price of RM2 on Nov 3, 2020.