Casino Shares Receive Boost From Strong Macau Gaming ResultsJanuary 6, 2010 11:03 am
News that Macau’s gaming revenue had risen in December by 48 percent, or $1.42 billion compared to a year earlier, provided the first real bit of good news for the industry in over a year, and has sent casino stocks soaring as a result.
Macau is a very important market for American casino operators, as it is the only place in China where gambling is legal. Las Vegas Sands Corp., MGM Mirage and Wynn Resorts Ltd have all invested heavily in the Chinese enclave, and the buoyant figures released received a positive response from a good news starved market.
Shares in Las Vegas Sands’ Macau unit, Sands China Ltd, hit HK$10.42 after rising almost 5%, while Wynn Macau, part of the Las Vegas based high end hotels and casinos corporation, saw their shares increase by 3.56 percent. MGM Mirage shares gained 62 cents per share to reach $10.35.
Other operators in the industry, who too saw good gains, were Melco Crown Entertainment Ltd, up 15.4 percent, to $4.14, and SJM Holdings up 5.7 percent to HK$4.63.
Gaming revenue has steadily improved in Macau since last summer, when the Chinese government lifted restrictions on the number of times residents from the mainland could visit Macau.
Macau’s gambling revenues rose 10% in 2009 compared to a year earlier, and CLSA’s head of Asian consumer and gaming Aaron Fischer, believes 2010 will see gambling revenues rise 17%. Commenting on the recent activity in the market, Fischer said:
“The first half will be very strong; we should see momentum maintain. We believe the earnings will surprise significantly on the upside. Revenue growth has been very strong for the last few months and these companies have been cutting costs a lot.”