“We believe the sector is at risk of entering a period where there is more room for downside rather than upside surprise,”
Despite a general boom feeling, the Hongkong stock market has seen shares of major casinos declining in recent six months. Apart from the statement that there is more room for downside than for upside, it is also said that insufficient labor and gaming-table allocations may add risks to the mix.
Whereas the second factor is purely dependent on government decision, the first one, insufficient labor, is currently purely a market-driven factor. It presents itself not only in a scarcity of construction labors, but also in actual on-the-floor labors (dealers, servers, housekeepers, engineers, technicians, etc.). Macau is looking forward to open several new casino resorts and estimates a need of over 20000 employees from 2016 onwards in order to operate these properties.
What are the upsides? A continuos visitor flow from China (despite declining visitor numbers from other countries) and a rather prosperous outlook of Chinese economy to keep that healthy.