Macau’s casino stocks stumble in Hong Kong trading

Macau casino stocks dropped in Hong Kong trading on Tuesday as the market re-opened after a holiday weekend, another jolt following slower-than-expected gross gaming revenue figures in the world’s biggest gambling hub. Macau casino operator shares on the Hong Kong Stock Exchange fell between 6% and 8.5% in early trading on Tuesday, GGR Asia reported. Galaxy Entertainment shares fell 6.5% while Melco International lost 9.7%, Sands China slid 6.2% and Wynn Macau lost 7.9%. The trading appeared to mirror Monday’s session when US-listed stocks linked to Macau casinos also slid. Wynn shares fell by as much as 9.3% to $151.84 in New York. Las Vegas Sands’ shares fell 8.2% and MGM was down by as much as 3.6%.Some analysts linked the drop to official data released on Sunday. Macau’s June GGR rose by 12.5% year-on-year to about $2.81bn, according the Gaming Inspection and Coordination Bureau, Macau’s regulator. It was the 23rd straight monthly increase for Macau gaming revenue but investors were disappointed – some were anticipating growth of as much as 18%.

By Caroline Byrne

“We believe that today’s weakness in the Macau stocks is largely related to high investor and analyst expectations caused by inflated consultant estimates, which have now been proved wrong for more than several months,” Nomura, the Japanese brokerage, said in a note on Monday.

VIP player spending was “softer” in the midst of the World Cup, Steven Wieczynski, an analyst at Stifel Nicolaus & Co., told Bloomberg.

Macau shares also took a tumble in June amid reports that China was considering opening cashless casinos on tropical Hainan island.

US casino operators have been betting on Macau amid slow growth at home. MGM Resorts International unveiled its $3.4 billion property in Macau in February, competing for punters alongside Wynn Palace and Las Vegas Sands’ Parisian.