Sands China Drops on Slowdown Concerns: Hong Kong Mover
Sands China Ltd. (1928), the Asian unit of Sheldon Adelson’s Las Vegas company, led a decline in Hong Kong- traded casino stocks amid concern slowing economic growth in China could hurt revenue growth in Macau’s gambling hub.
Sands China dropped 4.8 percent to HK$25.05 at the close of Hong Kong trading, while Galaxy Entertainment Group Ltd. (27) slid 3.1 percent and Wynn Macau Ltd. (1128) lost 4.2 percent. The benchmark Hang Seng Index declined 2 percent.
Growth in Macau, the world’s largest gambling hub, has slowed this year after mainland Chinese tourists pushed gaming revenue up 42 percent in 2011. China’s purchasing managers’ index fell to 55.2 in May, adding to evidence of slower growth in the world’s second-biggest economy.
“The decline in Macau’s gaming revenue growth as well as China’s sliding PMI all signal a slowdown in the economy,” said Gabriel Chan, a Hong Kong-based analyst at Credit Suisse Group AG. “The gaming sector is attractive in the longer term, but we are waiting for a better entry point.”
Macau’s gambling revenue increased 7.3 percent in May, the slowest pace since July 2009. Gambling revenue last month for the six casino operators in the former Portuguese colony rose to 26.1 billion patacas ($3.3 billion) from 24.3 billion patacas a year ago, the Chinese city’s Gaming Inspection and Coordination Bureau said June 1.
MGM China Holdings Ltd. (2282) fell 5.3 percent to HK$11.10, SJM Holdings Ltd. (880) dropped 4.5 percent and Melco Crown Entertainment Ltd. (6883) slumped 6.1 percent at the close of Hong Kong trading.
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