By Kate O'Keeffe
Though the decline in Macau's monthly gambling revenue
accelerated in September, casino shares led the Hong Kong market
higher as investors found silver linings in the beaten-down
sector.
Gambling revenue in the Chinese special administrative region
fell 12% in September to 25.6 billion patacas (US$3.2 billion)
compared with a year earlier, government data showed Monday. It was
the fourth month in a row of declining revenue, extending a losing
streak that interrupted five years of rapid growth that transformed
Macau into the world's largest gambling center.
The casino industry there is now facing a host of headwinds,
however, in particular a Beijing-led crackdown on corruption that
has caused VIP gamblers to shy away from the baccarat tables.
September's fall was also Macau's steepest during the current
downturn. Monthly gambling revenue fell an average of 4.5% over the
previous year from June through August.
Still, shares of Hong Kong-listed casino companies rose sharply
in Monday trading, with Las Vegas Sands Corp. unit Sands China Ltd.
rising 7.1% to 42.95 Hong Kong dollars ($US5.54) and Galaxy
Entertainment Group Ltd. gaining 6.6% to HK$48.35. That compares
with a 1.1% rise in Hong Kong's benchmark Hang Seng Index.
Some analysts said that Macau's poor revenue data was still
slightly better than expected and that investors may also have been
encouraged by a surge in tourist arrivals during China's weeklong
National Day holiday. Visitors to Macau over the first five days of
the holiday rose 14.4% from a year earlier, Macau government data
showed Monday. "But whether that will translate into revenue, no
one knows," said Billy Ng, analyst at Bank of America Merrill
Lynch. "I don't know if the stocks are up today for the right
reason or the wrong reason," he said.
Daiwa Capital Markets said in a report Monday that the Macau
market would likely remain poor in October, citing continued weak
gambling play from high-rollers and unseasonably low hotel room
rates, among other factors.
Casino executives also said that the Macau government's recent
decision to further tighten restrictions on smoking in casinos
could adversely affect revenue.
Jacky Wong and Gregor Stuart Hunter contributed to this
article.
Write to Kate O'Keeffe at kathryn.okeeffe@wsj.com
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