IAG 2006-06-07 Jun-Jul - page 6-7

outh agape,
Inside Asian Gaming
has been tracking the unrelenting ascent of
Melco International Development’s share
price. For much of 2004, Melco shares had
of Macau’s casino revenue from the second
half of that year thendrove theprice steadi-
ly up to HK$8.95 by the first trading day of
Whenmeteorsmake it onto institutional
radars, they usually gainmomentum. At the
start of this year, Citigroup issued a“buy”call
onMelcoshareswithwhatseemed likeanag-
gressiveHK$15price target.Thisheraldedag-
gressive fundbuying,andby June1 the share
What goes upmust come down – but not necessarily all theway, and a higher ascent could follow,
especially if theworld’s largest financial institutions have anything to say about it
pricehadblasted toHK$21–endingup3.4%
on thedaydespite the company’s placement
of a further 63.6million shares,which techni-
callydiluted thevalueof theexistingshares.
Of course, it hasn’t all been smooth sail-
ing upwards. OnMay 22,Melco’s share price
dropped10% tocloseatHK$16.8as investors
took theHongKong stockmarket’s 508point,
3.1%drop thatday to takeprofit.But then the
ascent resumedon the news thatMelco and
its joint venture (JV) partner, Australia’s Pub-
lishingandBroadcastingLtd (PBL),were seek-
ing a listing on theUSNasdaq exchange be-
fore theendof theyear, inadealwhichwould
value the JV at more thanUS$6 billion – the
consensus is that theexpected20% listingof
the JVonNasdaqwill raiseUS$1-1.6billion.
Are the Bulls Biased?
Citigroup,CreditSuisseandUBSaresaid tobe
workingon the listingdetails for theplanned
initial public offering (IPO). That is a caveat
to Citigroup’s revised HK$23 target price
and Credit Suisse’s aggressive HK$30 target.
DeutscheBank,meanwhile,sees thepricego-
ing to HK$25. As the January issue of
pointedout,when thebigboys
ofbankingcollectively issue suchbullishcalls,
their targetscanbecomeself-fulfilling.
Artist’s impression of City of Dreams
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