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Genting Shares Tumble Following $300 Million Rights Issue

Genting shares plunged 15% to 1.59 ringgit on Monday after the Malaysian conglomerate announced a rights issue aimed at raising over $300 million. The move, intended to settle outstanding loans and bolster working capital, triggered a sharp market reaction that pushed the company's year-to-date losses beyond 47%.

Genting Shares Tumble Following $300 Million Rights Issue

The company plans to funnel 800 million ringgit—roughly $195.8 million—toward debt repayment, with an additional 429.5 million ringgit earmarked for general operations. Genting Malaysia, a key subsidiary, mirrored the parent company’s decline, dropping 6.7% to 1.39 ringgit.

Analysts at Maybank Investment Bank downgraded the stock from buy to sell, slashing their price target from 2.88 ringgit to 1.49 ringgit. Yin Shao Yang, an analyst at the firm, noted that the fundraising effort suggests Genting is struggling to refinance existing debt with longer-dated instruments. He warned that the company might be forced to cut dividends or seek further equity dilution to stabilize its cash position.

Broader macroeconomic headwinds, including persistent inflation and cooling consumer confidence, continue to pressure the global hospitality sector. Public Investment Bank analyst Ng Bei Shan pointed to rising energy costs and a softening U.S. labor market as significant obstacles to near-term earnings growth. Consequently, the bank lowered its target price for Genting to 2.00 ringgit, describing the firm's outlook as increasingly uncertain.

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