Melco Crown Rises to Three-Week High on Resort Construction
Melco Crown Entertainment Ltd. (MPEL), a Macau casino operator, rose to a three-week high in New York after Sterne Agee & Leach Equity Research said in a report a new resort will resume construction in 45 days.
Melco’s American depositary receipts jumped 2.8 percent to $12.23, the highest price since May 29. It traded 3.5 percent above the Hong Kong shares, the largest premium since March 8. Melco has dropped 10 percent this quarter after surging 42 percent in the first.
Construction of Melco’s Studio City Macau resort will resume in about 45 days and begin operations within three years, Sterne Agee analyst David Bain said in a report today, without citing a source for the information. Melco is better positioned than its competitors to take advantage of the expansion of Macau’s increasingly popular Cotai Strip, he said.
“A pipeline in Macau is very difficult to come by, and Melco has it,” said Bain, in a phone interview from Newport Beach, California. “The shares have traded down this quarter and don’t yet reflect the Studio City project.”
Melco, a venture between Australian billionaire James Packer and a son of gambling tycoon Stanley Ho, is seeking to raise about $2.2 billion through a loan and bond sale to fund the Studio City project, two people familiar with the matter have said.
Bain has a buy recommendation on Melco with a 12-month price target of $23.
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