Pansy’s Nevada Victory
Nevada gambling authorities have given Pansy Ho the nod to go-ahead with her US$ 1.1 billion Macau casinos partnership with MGM Mirage Inc. A delighted Pansy Ho told reporters, “For almost all of the 40-some years of my life, I have been trying to find an open forum to find and to express that I believe I have the capabilities to be an independent person and also to obtain independent success”. Pansy Ho and MGM Mirage Inc. (NYSE: MGG), however, aren’t out of the woodwork yet, because the recommendation is pending final approval. Their recommendation must be confirmed by the Nevada Gaming Commission, which will meet sometime in late March. They’re expected to accept the positive recommendation and give Ho the final approval. The Mississippi Gaming Commission approved the alliance between MGM and Pansy Ho in February 2005. The New Jersey Attorney General’s Division of Gaming Enforcement is also looking into the arrangement. Under Nevada’s laws, holders of state licenses such as MGM Mirage can’t violate gambling laws abroad.

Dow Jones gaming gauge
The Dow Jones U.S. gambling index recently reported that casinos were one of the best performing sectors between November 2006 and January 2007. Their index climbed 25.04 percent, spotlighting the MGM Mirage, Las Vegas Sands Corp. and Wynn Ltd. as the top three earners. Specifically, MGM was up 61.3 percent, Wynn soared to 52.4 percent and Las Vegas Sands was ahead by 40.8 percent, according to the index. Macau, naturally, was the secret to their success, the Dow Jones said. The index also noted that Macau saw its gambling revenue leap 22 percent to US$6.95 billion last year. The amount was 17 percent higher than its US$5.92 billion total in 2005. Travel and tourism were close on gaming’s heels with a 41.09 percent spike over the past year.

Legendary sale
Macau legislator and entrepreneur David Chow Kam-fai cut a “legendary” deal last month that garnished him HK$ 210 million. Along with several “secret” shareholders, Chow sold a 45 percent stake in his privately held Macau Legend Development to a group of private equity investors for a crisp HK$ 3.02 billion. According to Merrill Lynch, this was one of the largest private equity offerings out of Macau. Moreover, the deal demonstrates international investors increasing appetites for Macau’s gyrating entertainment and leisure sector, particularly gaming, said Merrill Lynch. Legend owns the Landmark Hotel and adjoining Pharaoh’s casino and had a 49 percent stake in Fisherman’s Wharf prior to the transaction.

Lads goes for broke
British bookmaking behemoth Ladbrokes has entered into a joint-venture with HK technology company MegaInfo Holdings to form Asia Gaming Technologies. Ladbrokes will hold a 49 percent stake in the company in return for a HK$ 4.9 million investment. Analysts say the move will help them reap profits on the growth of fixed-odds betting in China. More precisely, Citigroup’s gaming analysts in HK forecast that Chinese lotteries will expand by 31 percent annually until 2010. At that point, China will become the world’s second biggest-lottery market. Last year, Ladbrokes made a deal to consult Beijing authorities to open the mainland’s first lottery pool betting shops.

Macau’s online mahjong
If government tests go well, Macau might see multi-site online Mahjong gaming begin later this month, sources say. Indeed, online gaming business are getting in position to spring on the action. Dynasty Gaming Inc. (TSXV:’DNY’) (‘Dynasty’) has announced that they signed a Letter of Intent with Sino Strategic International Limited (Australian Stock Exchange: ‘SSI’). Through the agreement, SSI will “distribute and promote” Dynasty’s “play-for-points” version of mahjong and other Asian games via a virtual private network (VPN) platform. SSI currently owns and operates about 500 retail outlets in Shanghai, under a license owned by the Shanghai Welfare Lottery Centre. In Shanghai, people currently have access to a VPN which offers legalised games and lotteries. Dynasty along with Angela Ho and Peter Kjaer are the organisers of the “World Cup of Mahjong”, to be held in Macau this May.

Wynn’s minimum wage
Wynn Resorts Ltd. Chairman and CEO Stephen A. Wynn recently rewarded himself for a job well done with a hefty raise. How hefty? According to a Securities Exchange Commission filing, his base salary has been lifted from US$ 2.75 million to US$ 3.25 million. Wynn has been receiving raises since he became the top-dog at Wynn in 2002. The company paid him US$ 2.3 million in 2005 as a base salary. He also received a handsome bonus of US$ 3.2 million in 2005.

Asian gaming stocks soar
Australia’s Aristocrat and Malaysia’s Genting were among Asian gaming stocks that have set share records in the past year. Both are up more than 40 percent, analysts report. Since 2006, the eight gambling stocks in the Morgan Stanley Capital International Asia-Pacific index have increased on average by 21 percent. By contrast, their US index, which consists of six gambling stocks, posted a 57 percent average gain. The US gains, of course, benefited from Asia’s casinos, mainly Macau’s. According to market value, the top 10 gambling companies in Asia sell on average for 19.4 times their earnings.

Zhuhai vending
Automatic card-shuffler maker VendingData Corporation (AMEX:VNX) will be opening facilities in Zhuhai as part its global restructuring strategy. The company will be sending two engineers from the US to oversee the company’s research & development and engineering division. Apart from an overhaul that will supposedly reduce costs by US$ 3.5 million annually, VendingData’s move to Zhuhai is part of an Alliance Agreement with Macau based gaming research and development firm Elixir Group Limited – which is a wholly-owned subsidiary of Melco International Development Limited. The move is also part of the company’s strategy to expand into Macau.

Melco PBL names new exec
Former LVN Sands Macau VP Garry Saunders has been named the new Executive Vice President and Chief Operating Officer of Melco PBL Entertainment. “Garry Saunders will be instrumental in providing operational perspective as we continue to develop and implement the overall strategic direction and development of the Company”, comments Lawrence Ho, Melco PBL Entertainment’s Co-Chairman and Chief Executive Officer. Saunders, 55, has a firm knowledge of the gaming market, having previously served as senior executive for ITT’s gaming operations at the Sheraton and Caesars World Divisions. He also was President of the gaming division at Playboy Enterprises. He is also a current member of the board of directors of Shuffle Master, Inc.

Money mogul for Melco
Money management mogul Manraj Sekhon of Henderson Global Investors is casting his chips on MELCO PBL and Macau. According to reports, Sekhon, who manages giant accounts such as the Mackenzie Universal International Stock Fund, is impressed with MELCO PBL’s rapid growth. Sekhon says that “the stock is not excessively valued relative to its peers”, but that “it trades at 11 times 2009 cash flow versus rival companies”…which trades around 15 times 2009 cash flow.

Pony up
Hong Kong Jockey Club chief executive Winfried Engelbrecht-Bresges is shifting the company’s scope in order to compete with Macau. “Our customers are a prime target for Macau’s casinos”, remarks Engelbrecht-Bresges. He also says that, “turnover has been in decline due to economic factors and shifts in gaming preferences. What we need to do is revitalize this base otherwise the club will be in jeopardy”. Part of the Jockey Club’s new strategy involves the opening of a clubhouse in Beijing which will “cater to the 50 percent to 60 percent of its members who travel to the mainland daily”, he explains.

Sands trapped
Despite violating casino age rules, the Gaming Inspection and Coordination Bureau has ordered the Sands casino to pay HK$ 740,000 to a minor’s mother. The incident began when the girl was playing slot machines with her mother and grandmother at the Sands. After placing HK$100 into a machine, it stopped on the grand prize. At first, the casinos refused to pay, so the family brought the matter to Macau gaming authorities. The gaming bureau warned operators to be more careful about letting minors into casinos. This ruling should sober them up. Also, the mother has been warned not to let her daughter into casinos and is being barred for an unspecified time to enter any of Macau’s casinos.

Central One booms
Sales of Central One Residences have already raked in HK$ 6 billion for Shun Tak Holdings, say local media. Currently, 700 units, or about 90 percent of all units, have been sold off for an average of HK$5,000 per square foot. Some went for HK$6,300 per square foot. There are currently 96 units left. Central One Residences spots have been hot since they began selling in November 2006. Shortly after opening for the market, an Iceland-based insurance company snatched up 68 flats for HK$ 782 million, which averages out to HK$ 4,400 per square foot. Shun Tak’s other residential Macau project on Taipa Island, Nova City, began selling last month. Forty units have already been purchased for HK$ 2,500 per square foot.

Brief buying dip
Overall residential transactions dipped last year according to a report released by Jones Lang LaSalle (JLL). As of November 2006, at least 14,800 residential transactions were recorded, a 24 percent year-on-year decrease. The JLL report also forecasts that Macau’s residential purchases in 2007 will rise by roughly 10 percent, despite the fact that numerous homebuyers might flock to Zhuhai for better bargains. Overall, the report was rosy about consumer confidence, owing to January’s 3.5 percent unemployment rate drop and high hiring rates at casinos.

Developers flock to Zhuhai
At least ten high-end residential developments are moving fast in Zhuhai’s up-market Jida and Xiangzhou neighbourhoods. Starting in January, posh complexes such as the Jin Bi Shi Dai in Jida began selling at RMB 8,500 per square metre. The Hua Nam Ming Yu sold 40 percent of its 170 units for an average price of RMB 6,500 per square metre – and that was just on its opening day. Another sizzling property speculators are watching is “The Grand Panorama”, an Onfem Holdings development. It consists of four blocks with 384 unites ranging from 120 to 400 square metres selling at RMB 10,000 to 14,000 per square metre. Zhuhai’s residential prices have risen 20 percent since 2005, according to Centaline’s Zhuhai branch.

Kingsway ransom
Discussions are underway to decide who will own the Kingsway Hotel.
The vintage, three-star Macau lodging, casino and sauna operation near NAPE is being sought by Hong Kong listed China Star Entertainment Ltd. Preliminary talks began in January between China Star, a Macau retail bank, and an un-identified third party. China Star Chairman Heung Wah Keung notes, however, that nothing has been agreed to. Of course, China Star has said that in January they entered into an agreement with Great Trust-Gestao E Participacoes Limitada to acquire a 38.5 percent stake in Kingsway Hotel Ltd. They reportedly paid a handsome HK$ 240 million for the honour. Should the discussions lead to a closing deal, China Star will indirectly hold 100 percent of Kingsway Hotel Ltd.

Second city stars
Macau and the Pearl River Delta are among the brightest stars in China’s so-called constellation of second-tier cities. They are, according to a study released by the Urban Land Institute and Pricewaterhouse Coopers, ripe for a rise in cash as part of a global boom for secondary city investment. Comments David Brush, the European head of Deutsche Bank’s property investment arm or RREEF, “We are buying in Macau and the Pearl River Delta rather than the most obvious cities. Two years ago we pretty much red-lined Shanghai and Beijing as they are momentum-driven rather than fundamentals-driven”. Also in the PPRD spectrum is Chengdu, which, the study says, can compete in size (at 10 million people) with western Europe’s capital cities. Xi’an, Wuxi, Harbin and Hefei were also cited for their investment potential, as were scores of second-cities in India and Russia.

Ho’s beach
Stanley Ho’s HK$ 923,558 Wave multiplex on Australia’s Gold Coast recently opened the first 108 of their 110 pre-sold apartments. The beachside building, which won the Emporis Skyscraper Silver Award in 2006, is raising real estate stakes on Broadbeach; the coast has seen land values climb by 30 percent in the past two years. Broadbeach is now touted by some to be “recession-proof”.

Macau fashion frenzy
It’s a fashionista fact: Macau is quickly becoming on-line as an A-list China destination for cosmetic and fashion companies. That’s why Italian fashion label Stefanel (STEF.MI) wants to boost sales by opening in Macau this year. Stefanel, which plans on dropping 10 million this year on global advertising campaign, hopes to boost overall sales by 28 percent or 380 million Euros (HK$102,455,556) by 2008. Stefanel will also launch shops in Shanghai and Beijing. Reports also say that other fashion brands are enticed by the six million square feet of retail space to open in Macau over the next three years. Macau’s retail sales grew 20.3 percent in the second quarter of 2006 to MOP 2.5 billion, according to Colliers International. Watches, jewelry and other luxury goods saw growth of 55.5 percent. Prada’s 2,000 square foot shop at Wynn Esplanade is doing so well that they will open a 3,000 square foot venue inside the Four Seasons at the Venetian.

Macau 4Q earnings rise
Per capita visitor spending in Macau for the fourth quarter averaged at MOP 1,670 (US$ 208), a six percent year-on-year rise, according to the Statistics and Census Service (SCS). At the head of the pack were mainland visitors who spent on average MOP 3,562 (US$ 445.25) per capita. On the retail front, per capita mainland expenditures rose six percent year-on-year at MOP 745 (US$ 93.13). The SCS also reported that per capita non-retail purchases also increased six percent, to MOP 925 (US$ 115.63).

Iran banking on Macau
Officials from Macau and Iran met in Beijing recently to explore bilateral trade ties. Iran’s Consul General in Hong Kong Abdollah Nekounam and Macau’s Secretary of Economy and Finance Tam Pak Yuen agreed that they would strive to increase investment, tourism, trade and banking cooperation. Iran-Macau Banking Chairman of the Board of Directors of the Monetary Authority of Macau, Teng Lin Seng, also “expressed willingness” to boost banking connections between Tehran and Macau.

Macau Beer goes to Ohio
Move over Miller, Macau Beer importer Aladdin Beverage (PINKSHEETS: ADTJ) is launching a three-year advertising campaign in the American “heartland” state of Ohio. The deal entails putting Macau Beer ads on 3,000 “mini-billboards” at over 150 venues throughout Greater Cincinnati. Mini-billboard ads saw an 8 percent growth in the first half of 2006 to the tune of US$ 3.5 billion.

Guangdong gains
Nine percent. That’s the growth target Guangdong Governor Huang Hua has set for the province in 2007. This is the third time in four years that Huang Hua has set the province’s growth at this rate, despite the fact that growth has exceeded this forecast by as much as five percent, writes Leu Siew Ying of the South China Morning Post. Last year, Guangdong’s economy grew by
14.1 percent and constituted eight percent of the national economy. Huang also set a three percent energy reduction target and a two percent overall pollution reduction target. Last year, Guangdong’s urban-dwellers average disposable income rose 8.4 percent to RMB 16,016 and farmers’ incomes rose by 8.3 percent at RMB 5,080. Meanwhile, Guangdong’s exports rose 26.8 percent to US$ 302 billion, 31.2 percent the of the mainland’s total exports.

Shenzhen seeks fifth border checkpoint
In order to foster faster trade between the mainland and HK, Shenzhen and Guangdong authorities are seeking to fast-track a fifth border checkpoint. Sometime during the first half of 2007, an evaluation report for a suitable site will be released. Shenzhen Mayor Xu Zongheng said more than 167 million passengers and 15 million vehicles passed through the SEZ en route to HK last year. Currently, Shenzhen has three checkpoints open at Huanggang, Lo Wu and Wen Jin Du. Mayor Xu said these older checkpoints, however, are overloaded. A fourth checkpoint is due to open later this year in Shenzhen’s western corridor. Macau’s Lotus Bridge Checkpoint has yet to open.

Les Amis ‘epicurious’ about Macau
Epicurean sensation Les Amis is rumored to be seeking a Macau location. According to The Strait Times (Singapore), the Les Amis Group wants to leaven their catering and pastry business – Canele Patisserie Chocolaterie – in Macau as part the company’s current strategy of niche marketing. Formed by Desmond Lim, Chef Justin Quek, Ignatius Chan and Chong Yap Seng, the Les Amis Group has won acclaim since they opened their eponymous French restaurant, Les Amis, in the Singapore Botanic Gardens in 1994. They’re only one of three restaurants in Asia who have received the Grant Award from Wine Spectator magazine for 10 consecutive years. In 2004, they opened the Canele Patisserie Chocolaterie, which also serves their numerous other restaurants and prepares lip-smacking chocolate morsels. Of course, Macau might have to wait for its just desserts. Les Amis spokesman Raymond Lim, 28, recently remarked, ‘We have a spectrum of choices on the dining front. However, if you zoom in on fine dining, I think other places in the region, like Hong Kong, may have better offerings.”

Lucrative lodging
Jones Lang LaSalle Hotels predicts that hotel investment in the Asia-Pacific region will reach US$ 7 billion in 2007. The fiscal fire will be stoked by the limited availability of assets, fierce competition and strong operating hotel performances, they forecast. Macau and the Pearl River Delta are prime growth spots. How so? According to reports, the majority of hotel stock in Asia is closely held by family-owned companies in Hong Kong, Singapore, Indonesia and Thailand. The translation: Macau is hence fertile hunting ground for investment-grade assets. Of course, Macau will have hotel competition from other Peal River Delta hotspots in Guangzhou, Shenzhen and Zhuhai. For example, the Ritz-Carlton will be open hotels in Guangzhou and Shenzhen in 2007. Apart from Macau, other fecund markets for investment grade-assets in the regional hotel boom include Bali, Laos, Malaysia and Vietnam.

More land for air
Macau International Airport operator CAM is planning to invest HK$4 billion to upgrade the runway capacity and double the passenger terminal by 2011, according to a new report. Authored by Dutch consultancy firm Naco, the report suggests that by reclaiming land, 19 aircraft parking spaces can be added and the size of the passenger terminal can be doubled. Moreover, the runway capacity could be increased by 50 percent, allowing for runway movements to increase to 30 per hour. Currently, runway movements average 20 to 22 movements per hour. The expansion is still pending government approval. Also in the air is Viva Macau’s proposal to the government to offer chartered services to the Philippines.

L.A. Times touts Macau travel
The Los Angeles Times is now recommending Macau over Dubai, Hawaii, Thailand or Spain as a scorching travel spot. Journalist Jane Engle’s top ten list of “don’t miss destinations” for 2007 placed China at the top of the list. Engle writes, “Consider a side trip to bustling Macau, which rivals Las Vegas as a world gambling capital. And unlike Las Vegas, Macau is steeped in hundreds of years of multicultural history”.

Travel packages pick-up
Macau received a record 2,925,724 package tourist arrivals in 2006. According to figures from the Statistics and Census Service (SCS), well over 50 percent of these packages were from the mainland. The 2006 results are a 9.3 percent rise from 2005. SCS estimates also show that Macau’s hotels in December 2006 received 12,978 visitors, a spike of 19.8 percent compared to December 2005. In fact, hotel guests constituted 41.5 percent of all visitors in 2006, the SCS reported.

City raises and lowers the travel bar
Thanks to growth in Macau and the expansion of open destinations for mainland travelers, the Hong Kong Tourism Board has lowered its 2007 estimates for inbound tourists. This year’s forecast set the bar at 26.4 million, a modest 4.5 percent rise. Last year’s target of 27 million visitors fell short with 25.25 million. Despite competition from Macau, HK is betting that the new spate of casinos will ultimately pull more travelers into the former British enclave. They cite stats that say Macau welcomed nearly 22 million visitors in 2006, a 17 percent rise from figures for 2005.

Japanese journeys jump
New casinos and the greening of downtown are enhancing Macau’s popularity with Japanese tourists, says Japanese media. While most of the tourists from Japan only stay one night in Macau as part of a day trip from Hong Kong, they tend to stay at the newest hotels. Last year, Macau greeted 220,190 Japanese tourists, nearly quadruple the numbers of 2003 when only 85,000 came from Japan.

Fly to Angola
Airline connections between Portuguese speaking Macau and Angola are getting tighter circa Guangzhou. China Southern Airlines recently announced that it will now have direct flights from Guangzhou to Luanda, Angola. The move is happy news to Guangzhou, which has the largest population of Africans in China in the so-called “Little Africa” section of the city several blocks west of the Garden Hotel. Analysts say the demand is linked with outbound tourism and Guangzhou’s per capita gross domestic product figures for 2006 at RMB 20,000. The new routes from Guangzhou will also connect with Dubai, Delhi, Sapporo and smaller cities in Southeast Asia.

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