Local partner for planned Boracay casino loses P719M in market cap after Duterte remarks

The local partner for the planned $500-million casino resort in Boracay on Tuesday lost nearly P720 million in market capitalization after recent remarks made by President Rodrigo Duterte that there is no plan for a casino project on the island.

Shares of Leisure & Resorts World Corporation (LRC) closed Tuesday at P5.35 per share, down by P0.60 or 10.08 percent from last Friday's P5.95 apiece.

LRC closed with a market capitalization of P6,419,210,939.20 on Tuesday, down by P719,911,527.20 from last Friday's P7,139,122,466.40.

Tuesday was the first trading day of the week, as Philippine financial markets were closed on Monday in commemoration of Araw ng Kagitingan.

"Yes, definitely, LR's movement today was on the President's statement that he doesn't want a casino on Boracay," Carlo Capacillo, senior dealer at AP Securities Inc., said in a text message.

Aniceto Pangan, equities trader at Diversified Securities Inc., agreed.

"Yes, I believe. His [Duterte's] remarks pulled down Leisure & Resorts," he said in a separate text message.

"Investors are focused on this development for LR, as it will be the main driver on the company's growth. Can probably account for more than half of their revenues once operational; hence investors will be very sensitive on any news," Capacillo added.

They were referring to Duterte's remark on Monday that there is no plan so far for the government to entertain a casino project in Boracay.

"Wala akong plano diyan [na] casino-casino. Tama na 'yan kasi sobra na. Casino dito, casino doon. Give it to the people who need it most," he said in a press conference in Davao City before leaving for China.

Photos from Malacañang, however, showed that Duterte met with Macau-based investors to discuss the planned project.

'Not a mega-casino'

LRC, along with its foreign partner Macau-based casino operator Galaxy Entertainment Group Ltd., plans to invest as much as $500 million to build an integrated casino-resort in Boracay.

The casino has already secured a provisional license from the Philippine Amusement and Gaming Corp. (PAGCOR), but has yet to submit the necessary applications for clearances and permits to the Department of Tourism (DOT) and the Department of Environment and Natural Resources (DENR).

In a separate statement, LRC earlier clarified that the casino will not be a "mega-casino" and will not exceed 7.5 percent of the total floor area of the planned resort.

"Thus, the planned Boracay Resort is expected to churn more revenues from the hotel and other ancillary businesses vis-a-vis the gaming segment as it attracts customers all over the region looking for luxury Asian destinations," LRC vice president for legal Katrina Nepomuceno said.

AP Securities' Capacillo said that the market will continue to monitor the developments on the planned project.

"The business is not yet existing so more accurate to say that it has an effect on markets speculation," he said.

"It is important to note, however, that the President can change his stance, so we will just have to follow every developments here," he added. — BM, GMA News