Macau Casino Operators Feel Brunt on Slowdown Rumors
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Is China really slowing down? That's the sense you get by watching the downside action in the Macau casino operators.
Shares of Wynn Resorts (Nasdaq: WYNN) are down 2 percent Friday after its Hong-Kong listed subsidiary fell 17 percent. Las Vegas Sands (NYSE: LVS) shares are down 3.5 percent after 14 downside action seen from its Hong-Kong listing. MGM (NYSE: MGM) shares are down 1 percent after its China subsidiary fell 12 percent.
While the glimmering lights of Macau have been a bright spot in the casino space, there have been recent concerns some junket operators - those which bring in the big money VIP gamblers - are having cash crunch issues.
The Financial Times reported junket operator Grand Korea Leisure stopped extending credit to some mainland China high rollers. The company said while the move was temporary, and similar to what it did for two months last year, it hasn't stopped the rumors mill from churning.
Another junket operators told the paper while he is not aware of any rivals experiencing a credit crunch, he has heard some mainland Chinese investors are pulling capital due to slowing conditions at home.
While there are clearly some worries about a slowdown, others still see clear upside ahead in Macau. In fact, earlier this week analysts at Deutsche Bank said strength continues in September and October will be a record breaking month.
Shares of Wynn Resorts (Nasdaq: WYNN) are down 2 percent Friday after its Hong-Kong listed subsidiary fell 17 percent. Las Vegas Sands (NYSE: LVS) shares are down 3.5 percent after 14 downside action seen from its Hong-Kong listing. MGM (NYSE: MGM) shares are down 1 percent after its China subsidiary fell 12 percent.
While the glimmering lights of Macau have been a bright spot in the casino space, there have been recent concerns some junket operators - those which bring in the big money VIP gamblers - are having cash crunch issues.
The Financial Times reported junket operator Grand Korea Leisure stopped extending credit to some mainland China high rollers. The company said while the move was temporary, and similar to what it did for two months last year, it hasn't stopped the rumors mill from churning.
Another junket operators told the paper while he is not aware of any rivals experiencing a credit crunch, he has heard some mainland Chinese investors are pulling capital due to slowing conditions at home.
While there are clearly some worries about a slowdown, others still see clear upside ahead in Macau. In fact, earlier this week analysts at Deutsche Bank said strength continues in September and October will be a record breaking month.
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