Will US firms’ Macau casino licences get politicised by US-China trade war? Don’t bet on it
- Investment banks forecast a cooling in Macau casino stocks on the back of an economic slowdown in China, reduced cash flows and policy risks
- Shares in all six casinos have plunged since July
As the US-China trade war escalates, with all economic ties between the two countries at risk of being politicised, investment banks and fund managers are keeping a close eye on casino licences for American companies in Macau.
“The US-owned Macau casinos are sitting on what could be called a geopolitical fault line,” said Steve Vickers, the chief executive of Hong Kong-based specialist risk consultancy Steve Vickers & Associates.
“First, one of the main Macau casinos is the largest donor to the United States Republican Party and, thus, directly to President Donald Trump’s party finances.
“Second, the casinos’ long-term Macau concessions are being reviewed – unfortunate timing – and these key decisions as to renewals will be made in Beijing, not Macau.
Macau casinos could get caught in US-China trade war crossfire, say analysts
“Third, the arrest of the Huawei executive recently may be seen by some in the Communist Party as a personal attack on the leadership elite.”
If Beijing wishes to up the ante in the trade war, the US-owned casinos in Macau represent a potential target for retribution, he said.
