Promising 2010 for Macau land casinos

Gambling mecca starts the new year in an upbeat mood

With 2010 barely days old, the Reuters news agency reports that shares of Macau land casino operators rose this week on reports that gambling revenues in the enclave in December 2009 rose 48 percent from a year earlier, signalling sustained growth in the world's largest gambling market.

Macau casino revenue rose 48 percent to 11 billion patacas ($1.42 billion) in December, compared with a year earlier, according to a report from Portuguese news agency Lusa.

The Macau unit of Las Vegas Sands rose as much as 4.72 percent to a near three-week high of HK$10.42, while Wynn Macau the Macau unit of Wynn Resorts advanced 3.56 percent to a three-week high of HK$9.89.

SJM Holdings, Macau gambling tycoon Stanley Ho's flagship firm, gained up to 5.7 percent to its highest level in more than two months at HK$4.63.

"The first half will be very strong; we should see momentum maintained," said Aaron Fischer, CLSA's head of Asian consumer and gaming.

"We believe the earnings will surprise significantly on the upside," Fischer added. "Revenue growth has been very strong for the last few months and these companies have been cutting costs a lot."

Fischer expects Macau gambling revenues to rise 17 percent in 2010, a significant improvement on 2009's overall 10 percent.

Fischer's top picks are Wynn Macau, which is slated to open a new Macau resort on April 1, and SJM, Macau's biggest casino operator by market share, thanks to the recent opening of its latest property, "Casino Oceanus."

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