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Stephen Hand Administrator

Macau: propped up by high-rollers, but for how long?

Here we go again. Another sharp sell-off of Macau gaming shares on China slowdown fears. Industry forecasts have always underestimated Chinese high-rollers’ propensity to gamble, so are the latest prediction of gloom to be trusted?


The casino operators investing billions of dollars on new capacity are the worst hit, naturally. Galaxy Entertainment lost over 9 per cent of its market value in the last two days – it has just started building a $2.1bn extension of its existing property in the Cotai Strip which will double its size by 2015.


Sands China lost 7.6 per cent in two days. The owner of the Venetian has just opened the first phase of its $4bn Sands Cotai Central resort but is still building. Wynn Macau got off relatively lightly with a less than 6 per cent drop. It jas just received news that it can start building a new casino in Macau and according to Bloomberg, it is trying to line up a $1bn bank loan to help finance the construction.


The sell-off was sparked off by a flurry of analysts’ reports flagging up a marked slowdown in the so-called VIP segment in Macau. These are the big spenders who are taken to private rooms to gamble and make up roughly two-thirds of Macau’s casino revenues. Analysts put the growth in gross gaming revenue at 7-10 per cent so far in the first three weeks of May compared with the same period last year. This would be the slowest pace seen in a long time and much lower than the 15-20 per cent growth forecast for the whole year.

To read the full article and see the chart showing the decline in  "rolling chip" volume please click HERE

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