Macau Gaming Is Safe ... For Now
NEW YORK (
) -- Fears in the casino industry that spending and travel restrictions could hamper growth in Macau are waning after comforting signals from Chinese leaders.
According to the
South China Morning Post
, Mainland leaders intend to continue fiscal stimulus spending and appropriately loose monetary policies in 2010.
This, of course, is exactly what investors in the area's gaming stocks wanted to hear. Casinos with operations in the area, like
Las Vegas Sands
(LVS) - Get Report
and
Melco Crown Entertainment
(MPEL)
, had addressed concerns over tightening measures in their earnings calls over the past month.
Macau has become the primary source of growth for casinos, as gaming in the U.S., specifically on the Las Vegas strip, has experienced a steep drop amid the recession.
In January, Macau saw a 63.3% surge in gaming revenue to a record $1.58 billion.
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Looking to capitalize on Macau's robust growth, Sands and
Wynn Resorts
(WYNN) - Get Report
completed initial public offerings of their Macau assets last year. And following the success of these two deals,
MGM Mirage
(MGM) - Get Report
is currently in the process of undergoing an IPO of its own.
Still, despite the news, casino stocks are falling after consumer confidence showed a much-steeper-than-expected decline in February. Las Vegas Sands is sinking 2.7% to $16.07, Wynn is off 3 cents to $63.05, MGM is dropping 4.1% to $10.42 and
Isle of Capri Casinos
(ISLE)
is tumbling 5.4% to $8.05.
-- Reported by Jeanine Poggi in New York.
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