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Macau casinos’ slump hints at China slowdown

August 19 2011 at 8:07 PM
Waffer  (Login d3lta)
Middle Kingdom (China)

HONG KONG (MarketWatch) Macaus casino stocks joined in the Asian equity meltdown on Friday, marking what could be a potentially worrisome turn for industries tied to the fortunes of Chinese big spenders.

The casinos had managed to avoid getting sucked down in the global market turmoil in recent weeks thanks largely to Macaus seemingly unstoppable rise in gambling.

However, Fridays stock market tumble which left all six casino licence holders down 5% or more on an intraday basis in Hong Kong coincided with analysts raising concerns about the future in particular, the ability of Chinas high-rollers to maintain lavish spending habits.

In a note Friday morning, Deutsche Bank said conditions that had helped foster Macaus gambling boom now appeared to be drawing to close.

We disagree with the consensus view that Macau is immune to a recession, Deutsche Banks analysts said.

Sands China Ltd HK:1928 -11.00% , which earlier this month signed an agreement with Hilton Worldwide and InterContinental Hotels Group PLC IHG -5.25% to open hotels at its new multibillion-dollar resort in the territory, ended the session 11% lower, while SJM Holdings HK:880 -8.17% , the leading casino group by market share, and Wynn Macau HK:1128 -8.16% , both sold off to the tune of 8.2%.

On the surface, theres little to indicate a slowdown in casino activity. Macaus gambling revenue for the first two weeks of August, data show, is up 45% from a year earlier a growth rate that has been fairly consistent throughout the year.

However, dig deeper and signs surface suggesting Chinas high rollers are beginning to curb their spending amid tighter credit conditions and slowing wealth creation.
More discreet

One such indicator that Chinas wealthiest classes are beginning to cut their discretionary spending, according to Deutsche Bank, is slowing sales growth of luxury German cars.

Orders for Mercedes-Benz and other German luxury brands were up 22% in July from a year earlier, but this marked a deceleration from the 45% sales growth seen in the first half, Deutsche Bank said.

These growth figures are a generally reliable leading indicator of discretionary spending by Chinas affluent classes with about a three-month lag, Deutsche said.

But it may be that something of a slowdown in spending by high-rollers has already taken hold in Macau. The downturn, however, is likely more than offset by Chinas middle class, who have been traveling to Macau in greater numbers than ever before this summer.

We think accelerating growth in mass revenue is clouding the picture, Deutsche Bank said, noting that turnover in VIP gaming rooms where affluent players are extended credit is likely on the wane.

However, spending by mass-market gamblers will likely prove seasonal, this line of thinking goes, with a sharp drop in visitor numbers likely to become evident from mid-autumn.

Under a scenario in which the U.S. and Europe fall into recession, Chinas economic growth could decelerate sharply, according to Deutsche Bank. The global slowdown in turn would wash upon Macaus shores, knocking its revenue growth down to as little as 10%, Deutsche Bank said.

www.marketwatch.com/story/macau-casinos-slump-hints-at-china-slowdown-2011-08-19?reflink=MW_news_stmp

 
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Coalde
(Login coalde_one)

Re: Macau casinos’ slump hints at China slowdown

August 19 2011, 8:39 PM 

^YOU CHINA HATER YOU!!! YOU ARE JUST JEALOUS OF CHINA!!! CHINA CAN NEVER HAVE ECONOMIC DOWNTURN!!!

...wink.gif


[linked image]"All your lives a cosmic joke, fill your days with piss and smoke
The wolf waits at your door"
Motorhead, March or Die
[linked image]



    
This message has been edited by coalde_one on Aug 19, 2011 8:43 PM


 
 

Dilliwallah
(Login indiansunite)
Satyameva Jayate (India)

Re: Macau casinos’ slump hints at China slowdown

March 2 2012, 4:18 PM 

LOL



2yv021f.jpg

"It's God's responsibility to forgive the terrorist organization
It's our responsibility to arrange the meeting between them and god."
-Indian Armed Forces

 
 
WAFFer
(Login dzhuang)
Middle Kingdom (China)

Re: Macau casinos’ slump hints at China slowdown

March 4 2012, 12:02 AM 

^^^When an indian post a negative story about india on WAFF that will be the day..lol

 
 

Dilliwallah
(Login indiansunite)
Satyameva Jayate (India)

Re: Macau casinos’ slump hints at China slowdown

March 4 2012, 12:22 AM 

We have enough Chinese (read:Oneman) here who bring the daily whines to our doorsteps. LOL

As such, there's not a lot we can post.



2yv021f.jpg

"It's God's responsibility to forgive the terrorist organization
It's our responsibility to arrange the meeting between them and god."
-Indian Armed Forces

 
 
WAFFer
(Login dzhuang)
Middle Kingdom (China)

Re: Macau casinos’ slump hints at China slowdown

March 4 2012, 2:27 AM 

^^^Well at least we post different kinds of stories...unlike you indians who can only post anti-chinese stories..since there's nothing positive about india...lol

 
 

Dilliwallah
(Login indiansunite)
Satyameva Jayate (India)

Re: Macau casinos’ slump hints at China slowdown

March 4 2012, 3:15 AM 

You want to read stories? Bed time ones?

Go google them.




2yv021f.jpg

"It's God's responsibility to forgive the terrorist organization
It's our responsibility to arrange the meeting between them and god."
-Indian Armed Forces

 
 
WAFFer
(Login dzhuang)
Middle Kingdom (China)

Re: Macau casinos’ slump hints at China slowdown

March 4 2012, 3:58 AM 

^^^Then don't complain if other do to you what you do them

 
 

Dilliwallah
(Login indiansunite)
Satyameva Jayate (India)

Re: Macau casinos’ slump hints at China slowdown

March 4 2012, 4:10 AM 

What's your point? Please elaborate.




2yv021f.jpg

"It's God's responsibility to forgive the terrorist organization
It's our responsibility to arrange the meeting between them and god."
-Indian Armed Forces

 
 
 
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