Optimism is in shorter supply than usual at the Hong Kong stock exchange with economic worries plaguing the market. Some of the Far East’s most lucrative casino business locations weren’t spared as doubts emerged over the Chinese economy echoing worries across the globe.
Shares in the company formerly majority owned by Stanley Ho were hardest hit. SJM Holdings closed at down HK$3.60 at HK$10.50 representing a loss of around 26%. MGM China shares dipped below HK$10 to HK$8.21, a decrease of just over 20% with Galaxy Entertainment also entering single digits after taking a 19% hit to close at HK$9.42. Sands China saw a significant loss as 14% was wiped off its shares to leave them at HK$15.98 and Steve Wynn’s Wynn Macau project was down 11% to HK$16.74. Melco Crown was the least affected by the downturn and even then they still saw more than 5% wiped off their shares (HK$7.85)
Even if investors are showing their preference with their feet, those on the ground are far more confident. Michael Leven, president of Las Vegas Sands, the largest of the US-based groups operating in Macau, told a conference on Saturday, “When you’re on the ground and see what is happening, it’s very, very hard to be pessimistic.
“We haven’t seen any problems there and we continue to be very, very, very bullish on the Chinese situation.”
Recent uncertainties over whether or not Macau will choose to grant casino business firms new concessions to operate in ten years time have also done their best to derail what is the biggest market in the global gambling industry. If that were to occur the amount of destinations that could benefit is huge. Couple this with the growth being seen in the online side of the market and you see why Leven remains optimistic despite the stocks dropping.
