• It's Here!

    Etf Pro

    Get the big financial market moves right, bullish or bearish with Hedgeye’s ETF Pro.

WHAT BEIJING GIVETH… destination-macau.com

CASINO STOCKS FALL AFTER VISA RULES TIGHETENED scmp.com

The Macao Daily broke the news on Wednesday that visa restrictions have been tightened once again by the authorities in Guangdong.  Shares in Macau casino companies fell yesterday as the news broke.  The frequency with which visitors can apply for visas to travel to Macau has gone from once every three months, to once per month, to the current limit of once every two months.  The reasoning behind this fluctuation is unclear and has caused some confusion. 

DM believes that analysts have paid too much attention to the Individual Visit Scheme, both in boom and gloom days, stating that “there has been only two months out of the past 18 when mainland arrivals really plunged, and that was around this time last year, when both IVS arrivals and tour group arrivals fell sharply”.  The recent boom, according to the author, is more influenced by the financial well-being of Macau’s VIP customers than the IVS scheme.

TABLE FOR SIX? destination-macau.com

The recent discussions led by Macau’s government regarding limits on table capacity expansion and raising the minimum age of casino visitors to 21.  DM sees this as positive news for the Big Six.  There is ample supply in the market; The Venetian had more than enough space no its floor during Golden Week. Considering that Lots 5&6 will be started as soon as possible, Galaxy is getting its Cotai resort going again, the government is clearly looking to calm the pace of expansion. If anything, DM believes investors should be concerned with diminishing industry ROI numbers as more projects are brought to completion.  There are many questions that remain to be answered, for instance, if there are unilateral caps or quotas imposed, how will the government decide who gets what?

MGM, HO PLAN MACAU CASINO EXPANSION, MULL ASIAN IPO Bloomberg.com

MGM Mirage and Macau partner Pansy Ho plan on expanding their casino and exploring sites for potential resorts as they consider an initial public offering, according to a report on Bloomberg.com today.  Jim Murren, MGM CEO and Chairman, is quoted saying that MGM is “working on plans” to finish the 70,000 square feet of its casino’s second floor.  As for a possible IPO, Murren says that no decision has been taken but that “both partners have discussed it, and we believe it’s a very viable and attractive option… there’s been a very positive disposition towards it from both partners.”

Some commentators believe the indications from MGM that an IPO could be on the cards should be viewed cautiously given the “unclear picture” in light of the recent travel restrictions and the possible implementation of new laws concerning slot machines being banned from residential areas and raising the age for customers and staff at casinos to 21 from18 .