Some details on Chinese shadow banking
There is an interesting article on “shadow banking” in China. See the link below. We’ve written about this being a potential negative for junkets in Macau. These “banks” are offering yields higher than those provided by traditional banks and may compete with rates paid by junkets for capital. Liquidity fuels the junket business and serious competition for capital could have negative implications on junket liquidity.
Of course, we first started writing about this as a potential risk months ago and junket volumes have only accelerated since. At this point, it is only a risk factor, but one we are monitoring closely as we continue to analyze weekly Macau data.