Macau Casino Trades Contiune to Soar UNLESS…

Posted: October 6, 2011 in Uncategorized

6th Oct 2011

Commentary by:   “Beijing Junky”

I read The Business Times recently as well as lots of news about stocks of Macau casinos (listing in Hong Kong) tumbling down like asteroids…

In fact, it is inevitable that under the dark clouds of Greek & EU financial (debt) problems, many fund managers and public equity investors are panic like shit hitting the fan.  Investment bankers are pushing the scenario of “China Melt Down” because they say Chinese might not be able to sustain huge debt within mainland China, and liquidity in China will soon dry up etc.  Let me tell you, it’s Yes and No.

Chinese enterprises, state-owned and private alike, are the main pillars for China’s exports.  However, one thing is very different from the western business world.  China does not have a free capital market.  Asset pricing including stocks and properties are mostly policy-driven rather than market-driven.  China banking system no doubt has huge debt issue but their “Beijing father” is full of cash!  Re-capitalization will be carried out whenever Beijing deems fit.  Unlike the western economy, that Lehman Brothers was allowed to be folded-up.  Capital flow control is another powerful tool the Chinese government uses for many years regardless of Deng’s open-market system within the communism-socialist state of economy.

So, even the public equity slump has taken place everywhere and in particular, driving down Hong Kong listed casino stocks, it is time to consider picking up some real value casino stocks.

Macau casino trade (i.e. revenue) will continue to soar upwards in the next 18 monthsUnless the following events won’t happen:

(1)  The changing of guards within the Chinese Communist Central Politico Committee next years as well as key political positions, during the 18th Chinese Communist Congress.

(2)   Beijing continues to support and showcase one country-two systems in Macau territory.

(3)   Beijing continue to own China’s major banking institutions.

(4)   “Underground Banking Channels” continue to exist between mainland China and Macau.

(5)   Chinese Junket system continues to hold the fort in Macau, with a strong market share of 70+% junket business of the total casino revenue.

(6)   The consistent “free” flow of RMB500b or so, into Macau and regional casinos…

  1. Philbert says:

    wish your things surrounding it Macau Small house Business Contiune to Rise UNLESS… « Professional Sod

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