With Macau outpacing Vegas, markets are getting wise to the need for international growth.
Casino and gaming stocks were red hot Monday as Macau released gaming revenues for the month and large players like Las Vegas Sands and Wynn Resorts won big on their exposure to Asian markets.
Monday??????s top performer, though, was Macau-based Melco Crown Entertainment ( MPEL - news - people ), surging 5.89%. Macau, the only Chinese territory where casinos are permitted, experienced a huge increase in gambling revenues: the territory??????s Gaming Inspection and Coordination Bureau reported gross revenue was up 39.8% in September to $1.9 billion.
The figure fell short of July's 70% year-over-year increase, the numbers are still strong and appealing to American investors, says Deutsche Bank analyst Chris Worenka. ??????Even though we are seeing tough year-on-year comparisons, Macau??????s continued growth has been appealing to US investors who are tired of sluggish domestic growth,?????? he continues.
Macau became the world??????s premier gambling hub by revenue in 2006, as it surpassed Las Vegas and has continued to geographically dominate the sector??????s finances.
This has given an important boost to gaming stocks across the board, which rallied 3% as a group Monday. ??????These numbers are based on the continued growth in Macau. While the US is a recovery story, Asia is a story of secular growth,?????? Worenka says, pointing out the importance of other Asian markets such as Singapore. ??????Regional and domestic operators are growing but at lower multiples. Investors want liquidity, they want to get in and out very quickly.??????
Casino and gaming stocks were hit hard by the recession, bottoming out in March 2009. Since then, they have recovered substantially, but still remain below their pre-crisis levels.
www.forbes.com/2010/10/04/...nds-markets-equities-casinos.html
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