IRs – Integrated Resorts all the rage !

Karambunai shares surge 45pc on casino report

By Lee Wei Lian

September 22, 2010

KUALA LUMPUR, Sept 22 – Shares of Karambunai Corp Berhad surged 45 per cent to 8 sen today following The Malaysian Insider report that a proposed Integrated Resort (IR) at Karambunai in Sabah could potentially include a casino.

Karambunai’s main business is operating the Nexus Karambunai resort and is linked to Hong Kong listed NagaCorp Ltd which operates a casino in Phnom Penh,Cambodia. NagaCorp’s founder and CEO Tan Sri Dr Chen Lip Keong is also president of Karambunai Corp.

At 3.15 pm, it was up nearly three sen to 8 sen with 14.5 million shares done.

The Malaysian Insider

wrote yesterday that Malaysia appears to have jumped on the IR bandwagon with the unveiling today of a proposed 500-acre “eco-nature” resort in Sabah as part of the Economic Transformation Programme.Sources told The Malaysian Insider that the option to build a casino is on the table for the Karambunai IR – alongside a mangrove centre, water theme park and waterfront properties – to ensure a higher return on investment (ROI).

Although the presentation panels for the development made no mention of any casino, they repeatedly referenced Singapore’s highly successful Marina Bay Sands as well as Resort World Manila in the Philippines and Vietnam’s Ho Tram Strip – all of which are casino-anchored IRs.

One illustration, entitled “Case for Change”, argued that Malaysia lagged behind regional competitors in tapping into the strong demand for IRs from countries like China, Indonesia and Thailand, and pointed out that Singapore had already seen a 21 per cent increase in tourist arrivals since opening Marina Bay Sands and Resort World Singapore.

The Malaysian Insider

also understands that if a casino is built as part of the Karambunai IR, international players such as The Sands might be roped in to run it rather than local operator Genting.Some analysts however said that a new casino in Sabah would face obstacles.

“We note the rumour of a casino in Sabah but believe there are still many hurdles faced by this proposal for now,” said OSK Research in a report today.

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