Bloomberg News

Macau Casinos Decline on Visa, Credit Limit Concerns

June 26, 2012

Casinos Decline on Visa, Credit Limit Concerns

The Galaxy Entertainment Group Ltd. Galaxy Macau casino resort in Macau, China. Growth in mainland Chinese visitors to Macau may have softened in May as the Guangdong local government might be tightening visa issuance and as China UnionPay reduces the amount that can be spent overseas on credit cards, Chinese language Macau Daily reported on June 23. Photographer: Jerome Favre/Bloomberg

Macau casino stocks declined in Hong Kong trading amid speculation visa restrictions and limits on some China credit cards are slowing revenue growth in the world’s largest gambling hub.

Galaxy Entertainment Group Ltd. (27) dropped 5.7 percent to close at HK$18.12, Sands China Ltd. (1928) declined 5.8 percent, Wynn Macau Ltd. lost 2.8 percent.

Growth in mainland Chinese visitors to Macau may have softened in May as the Guangdong local government might be tightening visa issuance and as China UnionPay reduces the amount that can be spent overseas on credit cards, Chinese- language Macau Daily reported on June 23. Macau casino gambling revenue rose 7.3 percent in May, the slowest pace since July 2009.

“Recent weakness in Macau gaming revenue and visitation growth could be partially explained by the visa restrictions and reduction in China UnionPay limits highlighted by the Macau Daily,” Cameron McKnight, an analyst at Wells Fargo & Co., said in a June 25 research note. “While expectations have recently moderated, we believe outperformance in the Macau stocks is likely to be limited here.”

Visitors from the mainland drove casino revenue up 42 percent last year in the only city in China where casino gambling is legal, pushing up earnings at Macau operators. About 16 million mainland Chinese tourists visited the city in 2011.

Gambling revenue for the six casino operators in the former Portuguese colony rose last month to 26.1 billion patacas ($3.3 billion) from 24.3 billion patacas a year earlier, according to the Chinese city’s Gaming Inspection and Coordination Bureau.

“The report on visa tightening is a bit speculative,” said Grant Govertsen, a Macau-based analyst at Union Gaming Group. “We haven’t seen anything so far to convince us this is happening.”

MGM China Holdings Ltd. (2282) slumped 4.8 percent, SJM Holdings Ltd. (880), founded by billionaire Stanley Ho, dropped 1.98 percent, Melco Crown Entertainment Ltd. (6883) dropped 2.5 percent in Hong Kong trading. The city’s benchmark Hang Seng Index gained 0.45 percent.

Gigi Chiu, spokeswoman of the Macau Government Tourist Office declined to comment on the newspaper report.

To contact the reporter on this story: Vinicy Chan in Hong Kong at vchan91@bloomberg.net

To contact the editor responsible for this story: Anjali Cordeiro at acordeiro2@bloomberg.net


Silicon Valley State of Mind
LIMITED-TIME OFFER SUBSCRIBE NOW

(enter your email)
(enter up to 5 email addresses, separated by commas)

Max 250 characters

 
blog comments powered by Disqus