Sector Snap: Casino operators in Macau

NEW YORK — Shares of casino operators with properties in Macau climbed Monday as July gaming revenue edged up in the Chinese enclave and Melco Crown Entertainment Ltd.’s new casino reported promising monthly results.

The latest statistics indicate that Macau gaming revenue rose 3.1 percent in July, a marked improvement from June’s 17 percent decline, JPMorgan’s Joseph Greff said in a client note. The July results were likely helped by the waning of swine flu concerns, he explained.

Greff said he still favors Las Vegas Sands Corp. “due to a likely announcement to a path of improving liquidity, the ability to (hopefully) cut more expenses out of the business and what is likely improving Macau market trends in the second half of the year.”

The Sheldon Adelson-led casino operator is probably getting an additional boost from a recent report that said the company is looking to raise $400 million in a bond sale.

Shares of Las Vegas Sands added 59 cents, or 6.3 percent, to $9.94 in early morning trading. The stock has traded in a 52-week range of $1.38 to $59.17.

Melco Crown’s City of Dreams results were also a boon for the sector. The Hong Kong-based company, which develops and owns Macau casino resorts, said earlier Monday that City of Dreams posted increases in rolling chip volume and table game drop in July. Rolling chip volume is VIP play, while table game drop is the money, vouchers and other cash equivalents that gamblers exchange for gaming chips.

The $2.1 billion City of Dreams — which opened on June 1 — has three hotels, Las Vegas-style shows, an upscale shopping mall and restaurants. Macau is the only place in China with legalized gambling.

“We believe (City of Dreams) results are a firm positive following a less-than-stellar June that was hampered by weak hold and lower-than-expected volumes,” JPMorgan’s Carlo Santarelli wrote in a separate note.

Melco’s stock gained 32 cents, or 5.8 percent, to $5.88. Over the past year, the stock has traded in a range of $2.27 to $7.90.

Elsewhere in the sector, Wynn Resorts Ltd. rose $2.61, or 5.1 percent, to $53.78. MGM Mirage, which reported its results for the second quarter Monday, added 16 cents, or 2.2 percent, to $7.39.