Fitch sees no slowdown in Macau's gambling market
October 30, 2011, 9:51 pm TWN
HONG KONG -- Ratings agency Fitch said Saturday Macau's casinos were showing no signs of a slowdown despite China's economic growth cooling, as the territory cements its role as the world's biggest gambling hub.
Casinos in the former Portuguese colony posted large profit increases in their latest earnings season, even though investors were said to be increasingly concerned about a possible dip in Macau's gaming market.
"Despite some recent concerns that casino operators in Macau may soon face a tougher revenue environment, Fitch sees no evidence that tighter credit conditions and slowing growth in China are pressuring Macau gaming demand," the agency said in a statement.
Fitch said the Macau market will continue to post solid growth "albeit at a decelerating rate moving into 2012".
Shares in the casinos plunged earlier this month as concerns over China's economic prospects triggered fears of a credit squeeze in the country, which would affect the mainland Chinese high-rollers who have fuelled Macau's rise.
China's growth slowed to 9.1 percent in the third quarter, from 9.5 percent in the previous quarter, as government efforts to tame inflation and turbulence in Europe and the United States curbed activity.
Macau's gambling revenue jumped 39 percent year-on-year in September and grew 46 percent in the January-September period from a year earlier. Analysts are bullish on its October figures, which could set a new monthly record.
Since the city's gaming sector was opened up to foreign competition in 2002, Macau has leapfrogged Las Vegas in gaming revenue and continues to post record-breaking growth.
The boom in the gaming industry in Asia stands in sharp contrast to U.S. venues such as Las Vegas, previously a byword for gambling but which is now suffering the effects of the global downturn.
Macau, which was handed back to China in 1999, is the only Chinese city where casino gambling is allowed. It has six licensed casino operators.