The odds are not in Macau’s favour even as the world’s casino hub considers opening a stock market to diversify economy
- Analysts say while Macau must be lauded for it bold vision to launch a new stock exchange, the city lacks a solid financial industry to back its audacious proposal
Macau’s small size and equally small financial industry may prove to be a major stumbling block in its ambitions to launch a vibrant stock market, and the task looks even more daunting since it has to contend with a giant stock exchange next door in Hong Kong, say analysts.
So far Macau’s focus has been on gaming and tourism, but revenues from gaming have been steadily falling, as mainland Chinese stay away from the gambling destination amid a slowing economy. According to the Macau Gaming Inspection and Coordination Bureau, gross gaming revenue fell 9 per cent year on year to US$3 billion in August – its biggest monthly drop since June 2016.
This may explain why Macau wants to bet on something new – a Nasdaq-like stock market traded in offshore yuan to allow technology companies from the Greater Bay Area, which includes Hong Kong, Macau, Shenzhen and eight other cities from southern China, to raise funds.
Hong Kong, one of Asia’s biggest financial centres, is the region’s third largest stock market. Eight Macau-domiciled companies are listed on HKEX – six of them casino operators, including SJM Holding, owned by “King of Gambling” Stanley Ho Hung-sun and his extended family, Wynn Macau and MGM China. The exchange’s popularity as a listing destination has seen it crowned as the world’s top IPO market six times in the past decade.