Melco Crown Entertainment Ltd slumped to a three-year low in New York after Deutsche Bank AG maintained a sell rating and said gaming revenue fell last week, Bloomberg reported.
The shares slipped 4.4 percent on Wednesday to $15.94, helping lead a decline in a Bloomberg index of the most-traded Chinese stocks in the U.S. Macau casino stocks had closed lower in Hong Kong earlier in the trading day after Deutsche Bank said the gaming sector was hurt last week due to a move by junket operators to reduce credit offered to high-end gamblers.
A government crackdown on corruption combined with an economic slowdown in China has curbed spending by high rollers in Macau, the world’s biggest gambling hub. Gross gaming revenue fell 19 percent to 493 million patacas ($62 million) a day last week, or 18 percent below the average so far this quarter, Deutsche Bank analyst Karen Tang wrote in a note Wednesday.
“It’s a group issue of Macau casinos where there remains a lot of concern about when and at what level the gaming business will reach an inflection point,” Tim Craighead, a Bloomberg Intelligence analyst, said in an e-mail.
“Overall, the transition from a VIP-driven business to a mass-market oriented one is one that will take time.”