Macau’s casinos generated 28.74 billion patacas (US$3.59 billion) in revenue in January, up just 7 percent from a year earlier and marking the slowest growth since October 2012, the city’s Gaming, Inspection and Coordination Bureau said on Wednesday. Compared to December 2013, gaming revenue was down 14.1 percent last month.
The weak numbers led to a selloff of casino operators on the stock market, with Sands China (01928.HK) and Galaxy Entertainment (00027.HK) both shedding over 7 percent and making them the worst-performing blue chips Wednesday. Other players also suffered notable declines. Hong Kong’s benchmark Hang Seng Index ended 128 points, or 0.6 percent, lower at 21,269.
The slow growth of Macau’s gaming revenue, especially the VIP revenue, in January was probably caused by a sudden drop in liquidity in China, observers say.
Overnight Shanghai Interbank Offered Rates (Shibor) rose to 4.8 percent on Jan. 29, the last day of the Year of the Snake, compared with the usual level of about 3 percent. Seven-day Shibor was 5.1 percent that day, higher than the usual level of about 4 percent. The figures pointed to insufficient liquidity in the Chinese interbank markets. It is reasonable to assume that China’s rich were less eager to go on gambling trips amid the tight cash flow.
Fortunately, Macau is expected to see strong growth in mass gaming revenue due to continuous growth in the number of overall visitors, which rose 4 percent last year to about 29.33 million.
The former Portuguese colony recorded 360.75 billion patacas in gaming revenue last year, up 18.6 percent from 2012.
The number of mainland residents visiting the gambling Mecca rose 10 percent year on year to about 18.63 million, of which 43 percent traveled to Macau under the Individual Visit Scheme, Xinhua reported on Jan. 24.
China, Japan pace Asia M&A deals
Huge acquisitions of US assets by Chinese and Japanese companies in January made it the busiest start to the year for Asia’s dealmakers on record, the Wall Street Journal reported Wednesday. Mergers and acquisitions in the Asia-Pacific region rose 60 percent to US$67.2 billion from a year earlier. The value of acquisitions by Asian firms in other regions more than tripled to US$24.8 billion, the report said, citing Dealogic. In January, China’s Lenovo Group sealed two multibillion-dollar deals in a week, buying International Business Machines Corp.’s low-end server business for US$2.3 billion in cash and stock and Google’s handset business for US$2.91 billion. Last week, Industrial and Commercial Bank of China bought a controlling interest in South Africa’s Standard Bank Group’s global markets business for US$765 million, the report noted.
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