Macau gaming shares were among the best performing ones in the Year of the Snake.迷你倉 But as the Lunar New Year approaches, some investment banks are taking on a dimmer outlook for this sector. And amid reports about Japan opening new casinos to grab customers, share prices of Macau gaming companies went into a tailspin. But an authority on Macau's casino business told me all the talk about fresh competition is missing the point. The real challenge facing the former Portuguese enclave is rather to move the local economy away from overreliance on the gaming industry. Macau is turning its attention to the industrial and tourism sectors to diversify the economy, he noted. Outside competition is not really relevant, he explained, as Macau is unable to digest even the existing gaming business that comes its way due to shortage of land and manpower. Price-to-earnings ratios of Macau gaming stocks are very high, far exceeding the terself storages of their operating licenses. This has prompted calls for issuing more licenses or for the government to take back some of the licenses and operate casinos itself for social welfare revenue. But there is little incentive for doing either, as the gaming sector brings in very substantial revenue, more than enough to pay for social welfare expenditure. In any event, most people in Macau do not expect Chief Executive Fernando Chui Sai- on to touch the licensing issue during his present term. And as no major changes are expected for the gaming industry, concerns about potential competition or licenses are not immediate. I think the recent crash in gaming shares shows only one thing - that nothing escapes the laws of gravity. When share prices have gone up excessively, they must come down. It is simple as that, and all other ``reasons'' proffered for the plunge are likely just conjecture.Siu Sai-wo is publisher of Sing Tao Daily 迷利倉
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