The Shanghai Free Trade Zone is attracting a bunch of bank branches. This is obviously pretty good news for financial liberalization in cross-border trade and shows that there is pretty steep demand for freer financial services.
Well, the Macau Golden Week data is in, as well as September full month data. An 11.7% drop in full-month revenue probably implies that there is finally some bite to Xi Jinping’s counter-corruption campaigns given increases in capacity at the border gates. The politics might very well skew the high rollers away from Macau, and accelerate the move to more mass-market gaming. After all, the total visitor numbers for the Golden Week days were up 14.5%!
Big surprise – Chinese tour groups were not getting group visas to Hong Kong, and if you’re gonna go high-end shopping, it might be somewhat beneficial to do it in a city that isn’t gridlocked by protests that are partially related to a dislike of you even visiting said city…
I think full month October-ex-GW and November revenue data will be needed to evaluate whether the positive visitor data is just a blip on the radar, but I would be willing to go slightly shorter on that data than the 4.8% – 7.1% increases in decent casino stocks implies the market positioning is. (Not tomorrow, mind you, but taking a short position around month end to finance long positions in companies on the rebound in HK seems like a decent play.)
After all, businesses operate on margins and revenues, not the number of window shoppers. It hurts to do this analysis because I really think the Macau companies have gotten hammered a bit too hard, but that feeling doesn’t change the fact that the major revenue stream is significantly impaired going forwards, something that looks increasingly verified with this data.