Dr Chan: Macau Gaming Industry Reviving; Trump Unlikely To Wage Trade War

On 13 Feb, I was at the Business News award ceremony held at Hang Seng Management College. I think it is great that they have such an award. Traditionally, news/journalism awards almost always go to political or social news, which also carries a great weighting in the courses taught by schools of media and communication in universities. As a result, graduates tend to have insufficient knowledge of finance and economics.

Thus, it’s a good thing that this award by Hang Seng Management College could encourage universities to train and cultivate journalists specialised in business and finance. At the same time, it allows financial journalists to get more recognition and prestige.

Macau’s gaming industry going through a period of revival

On 14 Feb, Galaxy Entertainment Group (027.HK) registered a 6.9 percent surge on a single day. The stock saw its short-term peak in November last year before it went through repeated rises and falls.

Lately, the Macau government announced that gambling revenue for January was unsatisfactory. However, the stock price of Galaxy Entertainment had not adjusted greatly, and it is still higher than its low at the end of last year.

I have also noticed that Galaxy Entertainment often had sudden rallies in the past year, and speculators often had to chase and buy high. However, they would soon meet with a stock adjustment, and end up buying high and selling low, and they lose their confidence as a result.

In my view, the gaming industry in Macau is basically going through a period of revival/recovery, but it is still subject to short-term rises and falls, thus making it difficult for one to profit through short-term speculation. What one should do instead, is to hold the stocks patiently for medium to long-term investment.

Trump would not easily wage trade war

Reports have suggested that the US would modify the definition of currency/exchange rate manipulator. This is perhaps Donald Trump’s first step towards waging a trade war. However, China is after all the world’s second largest economy, and it is hard to wage a trade war against China without hurting the interests of US businesses. Therefore, even Trump has to tread very carefully here.

All along, Yuexiu REIT (405.HK) has been a high-dividend stock and can maintain a record of increasing the dividends it distributes every year. According to its performance announcement this Tuesday, its dividend has increased by another seven percent, which is wonderfully rare. But the reason for that could be attributed to Renminbi’s depreciation last year. Since Yuexiu REIT receives its income in Renminbi, converting that to Hong Kong dollar would mean that it actually incurred a loss there.