Gaming: Macau leads upswing in Asian gaming sector

17/11/2009 01:11:00

Macau is driving the Asian gaming sector’s comeback after it was dented by the global financial crisis last year, international credit ratings agency Moody’s said in a report released in Hong Kong yesterday.
Moody’s boosted its outlook for the industry to stable from negative as Asian casino operators report rising gambling revenue.
“We expect the current stabilising trend in Asia Pacific’s gaming sector to continue as the region’s economies recover, led by strong growth in China,” the Moody’s report said.
“Unlike in the US, Asia Pacific’s gaming firms have bounced back from an earlier slowdown, with Macau recording three straight months of year-on-year growth in gambling receipts,” it said.
Macau operators have benefited from a loosening in travel restrictions for mainland Chinese visitors – the territory’s ‘lifeblood’ – and a limited number of new venues, the report said.
Casinos in Australia and Malaysia also made it through the economic crisis intact, the report noted.
The rosy forecast comes as US gaming giant Las Vegas Sands launches a 3.4 billion US dollar share sale in Hong Kong yesterday to pay down debt and restart a Macau project stalled last year by the slumping economy.
Casino operator Galaxy Entertainment Group said a week ago that it also planned to complete a delayed 1.8-billion-dollar flagship resort in Macau, the only Chinese city that allows casino gambling.
Macau has leapfrogged Las Vegas in gaming revenue after opening up its market to overseas operators in 2002.

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Comments (1 posted):

Eric on 14/12/2009 09:49:26

The reputation of Moody's and other rating agencies have been long under attacked due to the US recession. Their ratings on the credit qualities of companies or financial products have been always behind market expectation. With an efficient financial market, most companies including gaming sector have incorporated its true value through stock prices and credit default swap. So, it raises a great question. Why are these rating agencies still existing? There is no doubt they do provide good credit write up, interview and evaluation of various companies in different sectors. However, for any sophistciated financial professional especially in trading, the rating agencies values are always behind. People do not trade stocks and bonds value based on after facts. Their credit rating values most of time only affects the market value a bit as efficient market has incorporated true value already.

Also, the credit rating agencies are always behind their work loads.

In this US recession, much of the Credit Rating agencies work quality and crediblity have been raised.

After all, the validity of their independent opinions are questioned by a lot of financial professionls. They are paid by the issuer but get to entertain the finanial community including Wall Street, London and Hong Kong.

For people who are from Macau and have money to invest in stocks and bonds, they have to do their own credit and market research very carefully. A simple investment or non investment grade rating of the company may be just only an opinion.

Haven't most investors in the world learnt about AAA quality of CDO, mortgage backed secrities and risky assets rated by Moody's and other credit rating agencies? After all, these financial securities turned to be toxic waste and financial mass destruction.

I like people from Macau and feel this is a great way to share on how to deal with credit risks in financial investment.