Macau Gaming badly hurt by China's tight liquidity

Stocks fell 9% amidst credit fears.

Macau gaming stocks fell 9% on average in the last month on fears of a slowing Chinese economy and concerns of a tighter credit environment. However,
SHIBOR has since subsided to around 5.7% yesterday.

"Tighter liquidity is detrimental to junket VIP volumes due to lower demand from a more costly roll and difficulties in acquiring cheap sources of credit. Furthermore, the risk of VIP defaults increases as rates rise," said Maybank.

Here's more:

Sands China is least exposed to any slowdown in the VIP segment, while Wynn is most exposed. With the most recent spike in SHIBOR, VIP volumes could post zero growth in 2014 if the SHIBOR sustains at the current unusually high rates.

Based on run rates of MOP0.9b per day, we forecast GGR growth of 20% YoY in June, off a low base last year. This translates into a half-year GGR growth of 15% YoY, and should run rates be sustained at current levels, we could see GGR growth of 13% YoY for 2013. We remain positive on the mass market gaming segment for the longer term; accumulate Sands China.