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Home arrow Macau arrow Galaxy, SJM fall as China keeps Macau travel curbs
Galaxy, SJM fall as China keeps Macau travel curbs PDF Print E-mail
Tuesday, 13 January 2009
Galaxy Entertainment Group Ltd., controlled by billionaire Lui Che-woo, fell the most in four years in Hong Kong trading after China failed to relax Macau travel restrictions.
According to Bloomberg yesterday, shares of Galaxy declined 19 percent, the most since January 11, 2005, to HK$1.16 today. SJM Holdings Ltd., billionaire Stanley Ho’s casino holding company, dropped 10 percent to HK$1.68, the most since it listed in Hong Kong.
The share prices of Macau casino operators have more than halved in the past year as travel curbs by China worsened the impact of the slowing world economy on gambling revenue. Investors expected China to ease restrictions when Vice President Xi Jinping visited Macau starting on January 10. Xi instead urged Macau to diversify its economy.
“Everyone knows” Macau needs to diversify, Gabriel Chan, a Hong Kong-based analyst at Credit Suisse, said by phone yesterday. “The immediate need is to help the labor market that’s been deteriorating because a lot of the casinos are laying off people. There was nothing specific to help” Macau.
China has restricted travel by its residents to Macau since early last year to limit growth in high-roller gambling.
Among the measures China has taken was restricting residents of Guangdong to one visit every three months starting from October 2008, instead of one trip every two months.
Melco International Development Ltd., declined 12 percent to HK$2.40, its lowest close since December 24.
Las Vegas Sands Corp., the third-biggest U.S. casino operator by value, halted construction in Macau in November to conserve cash. The company, which planned to invest at least $12 billion in Macau, has plunged 92 percent in the past year in New York trading.
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