Bloomberg News

Macau Golden Week Sends Melco to Six-Month High

November 02, 2012

Chinese stocks traded in New York extended a third month of gains, as Melco Crown Entertainment Ltd. (6883) rallied on October’s record gaming revenue in Macau.

American depositary receipts of Melco increased 3.7 percent in the week to $14.89, the highest level since May 2. The Bloomberg China-US Equity Index (CH55BN) of the most-traded Chinese shares in New York advanced 0.5 percent to 94.81 after posting a 2 percent increase in October. Seaspan Corp. (SSW:US) climbed 8.2 percent, the biggest advance since June, as the container ship operator reported a third-quarter profit after losses in the same period last year.

Macau casino revenue increased to 27.7 billion patacas ($3.5 billion) in October, topping a record set in the same month last year, as promotions during the Golden Week holiday attracted more Chinese tourists to the world’s biggest gambling hub. China is building a high-speed rail and bridge linking Macau with Hong Kong and the mainland as the nation aims to spur economic growth following a seven-quarter slowdown.

“Melco is a very well-run casino that has benefited from growth in Macau and will continue to benefit as new infrastructure makes it easier to get to the island,” Lawrence Haverty, a portfolio manager at Gamco Investors Inc., which oversees $36.7 billion in assets including Melco, said by phone yesterday from Rye, New York. “The long-term story for the casino stocks there is very powerful.”

China ETF Rises

The iShares FTSE China 25 Index Fund (FXI:US), the biggest Chinese exchange-traded fund in the U.S., gained 1.4 percent in the week shortened by Hurricane Sandy to $37.46. The Standard & Poor’s 500 Index (SPX) rose 0.2 percent to 1,414.20.

The Hang Seng China Enterprises Index (HSCEI) of mainland companies, also known as the H-share index, added 1.2 percent to 10,833.73 yesterday for a weekly gain of 3.7 percent. The measure rose more than 20 percent from a Sept. 5 low, indicating the start of a bull market. The Shanghai Composite Index (SHCOMP) gained 2.5 percent to 2,117.05, its fourth weekly advance in five.

Gambling revenue increased to an all-time high as Melco and casino operators Sands China Ltd. (1928), Galaxy Entertainment Group Ltd. (27) and Wynn Macau Ltd. (1128) ramp up expansion projects. Melco is building its latest casino, Studio City, a five-star hotel and film production facilities on Macau’s Cotai Strip. Sands China opened the second phase of its latest Cotai Central resort on Sept. 20, 10 days ahead of the Golden Week holiday.

‘Going Private’

Focus Media Holding Ltd. (FMCN:US) jumped 4.4 percent yesterday to $24.91, the highest since Aug. 23, with trading volume three times the stock’s three-month daily average, according to data compiled by Bloomberg. The advertising company’s board received a “going private” proposal on Aug. 13 at $27 per share from Chief Executive Officer Jason Nanchun Jiang, Washington-based Carlyle and Hong Kong-based FountainVest.

Bank of America Corp., Deutsche Bank AG and UBS AG joined Citigroup Inc., Credit Suisse Group AG and Singapore’s DBS Group Holdings Ltd. to help finance the buyout offer, Dow Jones Newswires said yesterday, citing people familiar with the deal.

Jing Lu, a Shanghai-based spokesman for Focus Media, didn’t immediately respond to an e-mail seeking comment outside normal business hours yesterday.

Video website operator Youku Tudou Inc. (YOKU:US), the Beijing-based company that completed a merger in August, tumbled 3.3 percent to $19.61 yesterday for a weekly decline of 1.3 percent.

To contact the reporter on this story: Leon Lazaroff in New York at llazaroff@bloomberg.net

To contact the editor responsible for this story: Emma O’Brien at eobrien6@bloomberg.net


Monsanto vs. GMO Haters
LIMITED-TIME OFFER SUBSCRIBE NOW

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

Max 250 characters

Companies Mentioned

  • SSW
    (Seaspan Corp)
    • $22.73 USD
    • -0.05
    • -0.22%
  • FXI
    (iShares China Large-Cap ETF)
    • $37.32 USD
    • -0.65
    • -1.74%
Market data is delayed at least 15 minutes.
 
blog comments powered by Disqus