The gaming exchange traded fund that tracks global casinos and resorts could be in for a cold streak as growth slows, especially with Asian tourists staying close to home during the Chinese New Year celebrations.
The Market Vectors Gaming ETF (NYSEArca: BJK) has declined 1.8% over the past week. Nevertheless, BJK has gained 41.5% over the past year.
RBC Capital Markets analyst John Kempf pointed out that gaming revenue in Macau, the world’s top gaming destination and only legal casino gambling region in China, was up 17% so far in January year-over-year, but it could slow next month, reports James Detar for Investor’s Business Daily.
“Mass table revenue was the lowest of any month in 2013” during the Chinese New Year celebration last year, Kempf said. The holiday will begin January 1 and end February 10 this year.
Looking further out, JPMorgan Chase expects Macau’s growth prospects to slow. JPMorgan analyst Kenneth Fong downgraded MGM China, a unit of Las Vegas-based MGM Resorts (NYSE: MGM), to neutral from buy and advised that “investors trim positions” in Macau casinos.
Casino resort shares all took a hit following the JPMorgan analysis. MGM Resorts International was down 2.5% Thursday, Las Vegas Sands (NYSE: LVS) fell 2.3% and Wynn Resorts (NasdaqGS: WYNN) declined 1.9%.
The Market Vectors ETF has a 7.9% weight in Sands China, 4.1% in Wynn Macau and 3.2% in MGM China.
Market Vectors Gaming ETF
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Max Chen contributed to this article.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.