Macau casino stocks plunge on China fears

Macau casinos were hit by a massive sell-off Monday, as stock prices continued to plunge amid fears over a slowdown in China's economy that could hurt the world's biggest gambling hub. The Hong Kong-listed shares of gaming giants such as SJM and Sands China dived further at noon, widening earlier losses on Friday, with the leading SJM controlled by tycoon Stanley Ho tumbling 20 percent to HK$11.28. Galaxy Entertainment slumped 21 percent to HK$9.18, Sands China -- the Macau unit of casino giant Las Vegas Sands -- was down 14.3 percent and Wynn Macau, a unit of US casino mogul Steve Wynn's Wynn Resorts, fell 13.6 percent. The broader Hang Seng Index slid below the 17,000 psychological level to 16,722.46 at noon, down 4.95 percent on new fears over the eurozone debt crisis after Greece said it would miss the deficit target set by the IMF and EU. "Investors are very nervous about a slowdown in China and therefore Macau stocks are suffering," Aaron Fischer, the head of consumer and gaming research at brokerage CLSA, told AFP. The IMF has recently cut its growth forecast for China's export-driven economy, saying that turmoil in Europe and the United States, as well as a sustained anti-inflation drive, would take a toll. The weak sentiment triggered fears of a credit squeeze in China which would affect mainland Chinese high-rollers who have fuelled Macau's rise. The analyst however remained optimistic on Macau's gaming revenue figures in September, scheduled to be released later Monday. Fischer predicted September revenue to rise 40-45 percent. Gambling revenue soared 57 percent in August from a year earlier to a record high, with figures boosted by wealthy Chinese gamblers who continued to flood into the former Portuguese colony, which has six licensed casino operators. 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. Asia's strong growth in the gaming industry stands in sharp contrast to US venues such as the Las Vegas Strip, previously a byword for gambling but which is now suffering the effects of the global downturn. Macau, a former Portuguese territory which was handed back to China in 1999, is the only Chinese city where casino gambling is allowed.