Macau, and its neighbour China, were insulated from the worst of the credit crunch, thanks to the financial prudence of their citizens, but they weren't immune to the global recession. Macau, which is the only place in China where gambling is legal, expects that its economy will shrink by 9 per cent this year, having grown by 13.2 per cent in 2008.
However, analysts at investment banks Morgan Stanley and Goldman Sachs, which called the bottom of the Macau property market in the first quarter, expect the economy to return to growth in the fourth quarter this year. Goldman Sachs is even forecasting 10 per cent GDP growth in 2010.
The new management, installed after a boardroom coup in July, looks well-placed to ride the expected recovery in the local property market. Prices are around a third lower than they were at the end of 2007 and should get an extra boost from the encouragement given to first-time buyers in China's stimulus package. Visitor numbers to Macau have picked up sharply, too, and gambling revenues hit a record level last month.
Speymill's projects are progressing well and its landmark development, AIA Tower, one of the only three Grade-A office blocks in Macau, is now 86 per cent let. The Nam Van Peninsular residential scheme is virtually fully sold and the Lorcha residential project should have the necessary occupational permits early next year.
SPEYMILL MACAU PROPERTY (MCAU) | ||||
|---|---|---|---|---|
| ORD PRICE: | 72¢ | MARKET VALUE: | £84.1m | |
| TOUCH: | 70-74¢ | 12-MONTH HIGH: | 72¢ | LOW: 24¢ |
| DIVIDEND YIELD: | nil | TRADING STOCK: | $22.3m | |
| DISCOUNT TO NAV: | 33% | |||
| INVESTMENT PROPERTIES: | $263m | NET DEBT: | 38% | |
| Half-year to 30 Jun | Net asset value (¢) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (¢) |
|---|---|---|---|---|
| 2008 | 1.09 | -2.67 | -2.20 | nil |
| 2009 | 1.08 | -1.08 | -1.24 | nil |
| % change | -1 | - | - | - |
£1=$1.64 | ||||
