Growth Worries Pull down Macau Stocks Monday

October 03 00:00 2011

New York, October 3 ( – Worries that an increasing credit squeeze on private firms in China might hurt gaming revenue in the world’s biggest gaming destination pulled down Macau casino stocks Monday. SJM, a Hong Kong casino firm that controls 30 percent of the market fell 25.5 percent to a record low at HK$10.5. Galaxy Entertainment fell 18.9 percent and MGM China went down 20.5 percent to bring down the Hang Seng Index markets 4.4 percent.

Until now, the deepening economic crisis could not bring down the spirits of cash-rich Chinese gamblers who form the bulk of visitors to the enclave. This has been a blessing in disguise for U.S. casino companies Las Vegas Sands, Wynn Resorts, and MGM resorts International who have reported stellar half-year earnings through their Macau units Sands China, Wynn Macau and MGM China.

Philip Tulk, analyst at Royal Bank of Scotland in Hong Kong said that the casino’s mass market sector will remain strong but it might get weighed down by slowing VIP gaming revenue growth next year. He added that “Gaming revenue growth is going to come down next year. It is going to come down from 42-45 percent this year to on our estimates 18 percent.”