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Macau Gaming Companies Rising On Hong Kong Stock Market

Over the past several years, Las Vegas gaming companies have watched their stock prices fall drastically thanks to the economic recession. With the US gaming industry down, the companies turned to Macau as a way to weather the storm.

Not only did companies such as Wynn Resorts and Las Vegas Sands survive, they prospered. With initial public offerings in the past couple years on the Hong Kong Stock Exchange, the US-based gaming companies are thriving, especially in light of the recent boom in Macau.

Wynn Macau and Sands China, the sister companies of Wynn Resorts and Las Vegas Sands, have experienced strong increases in their Hong Kong stock prices heading into the new week. Wynn Macau led the way for gaming companies, with a rise of 7.3%, to HK$27.20. Sands China experienced a price increase of 4.3%.

SJM Holdings Ltd., a company owned by casino mogul Stanley Ho, rose to HK$19.16. SJM held a monopoly on the Macau gaming industry for decades, but when the government decided to end that monopoly and bring in foreign companies, the US-based operators pounced on the opportunity. MGM China Holdings Ltd. was one of those companies, and their stock was up 5.3%.

Last month, Macau casinos had the highest gain of any month in history in terms of gaming revenue. The revenue has grown upwards of fifty percent per month in the first half of 2011, and more growth is expected through the end of the year.

The boom has been so grand, that operators and the government agreed that a freeze on new facilities was in order. The freeze will take place after the latest round of expansion is complete. Residents of mainland China are the primary customer base for Macau casinos, and the casinos have enjoyed the loosened visa restrictions the Chinese government authorized last year.

Analysts are now touting gaming companies as a stable buy on the Hong Kong market. While other stocks continue to struggle due to the worldwide economic problems, gaming stocks have not only stabilized, but have performed better than analysts predicted when the year began.

In the US, gaming stocks have also rebounded. Wynn Resorts leads the way, with a price of $149.57. Since hitting a low of $15.40 in March of 2009, Wynn has grown for investors to the current price, gaining over $130 a share.

Similarly, but on a smaller scale, Las Vegas Sands hit rock bottom in March of 2009, with a price just under $2.50 a share. Today, Sands stock is up to $43.89, a gain of over $40 a share in just over two years.

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