Sands, Wynn to Win if HK Dollar Rallies

If the renminbi were allowed to be bet in Macau, the casino operators would benefit strongly. The renminbi, which the Chinese government allows to float in a moderate range, has already appreciated 4% vs. the U.S. dollar this year.

Browne, of Brown Brothers Harriman, says the renminbi is likely to appreciate at an annual rate of 10% this year and coming years. "China had a pick-up in inflation. One way to manage inflation is to let the currency appreciate," she says. China's attempts to curb inflation through higher interest rates and higher reserve requirements have had little effect, she says.

Down the road, some industry experts expect the Chinese government to eventually allow its currency to fully float freely. The Chinese currency is probably about 20% to 30% undervalued today, Browne says.

With gambling booming in Macau -- which has now surpassed the Las Vegas Strip as the world's largest gambling destination -- casino operator revenues are growing at a very quick pace. However, if currency policies in Hong Kong and China are loosened up, that pace of growth will be even faster.

« Previous Page

1 2

Next Page »