Seeking Alpha

Macau casino names gain after government clarifies

  • Secretary for the Economy and Finance Francis Tam says the government has not asked jewelry or watch retailers accepting UnionPay cards to cease operations or move out of casinos.
  • Sterne Agee analyst David Bain's top pick remains Melco Crown (MPEL +4.7%) thanks to its low valuation and catalysts like the opening of the only major casino in Asia this year (City of Dreams in Manila), likely Japanese gaming expansion approval, the opening of Macau's next new casino-resort next year, the best-located casino in Cotai, and longer-term potential for increased dividends and buybacks.
  • Bain also notes a positive shift in sentiment for Macau names of late.
  • Also on the move: Wynn Resorts (WYNN +2.8%), Las Vegas Sands (LVS +2.6%), MGM Resorts (MGM +2.8%).
Comments (3)
  • Howard Jay Klein
    , contributor
    Comments (104) | Send Message
     
    Very bullish news for Macau operators particularly those who court VIP as a segment. A crackdown on the practice could have significantly impaired VIP segment at all properties. This news tells us that the Chinese government as is its won't and as our management sources in the marketplace have privately believed, would not
    stifle the goose laying the golden eggs in Macau with a ruling that would effectively kill the Union Pay role in the runaway success of the jurisdiction. Also looming in the future, and the Chinese have a traditionally long view of economics, was the increasing prospect of legalization in Japan in time for the 2020 Olympics and the
    inferential impact brand new mega properties there could poach Macau volumes
    from Asians all over the Pacific rim.
    26 Jun 2014, 12:07 PM Reply Like
  • Tai Yu
    , contributor
    Comments (601) | Send Message
     
    There have been a lot of negative news for the Macau casinos lately that include restriction on how many days a Chinese Mainlander can stay there and anti-graft measures by the Chinese Government. Macau has little economic activities apart from casinos and the associated entertainment business. In my opinion the Chinese Government is not likely to a see a gloomy Macau. Any significant corrections offer opportunity to accumulate shares of LVS and MPEL.
    Technically for LVS i am seeing the low of $71 holding up well three times since mid April. LVS might have bottomed out and we are seeing a breakaway gap so far today.
    26 Jun 2014, 12:15 PM Reply Like
  • freeman8201
    , contributor
    Comments (645) | Send Message
     
    haha. Yes, I have heard reports of this subject. Patrons would use a bank card to buy a classy item, e.g., a watch, then pawn it. It is a way around china's money limit.
    26 Jun 2014, 05:46 PM Reply Like
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