China’s Shanghai Composite plummeted 8.5% overnight in what has been dubbed ‘Black Monday.’ The drop was its biggest one-day percentage decline since early 2007, pushing the index into negative territory for 2015. The index crumbled more than 10% last week after manufacturing data reinforced fears the world’s second-largest economy was undergoing a significant slowdown.
In the HKSE yesterday the big-six lost overall 6.5 percent with MGM China (-9%) and Galaxy (-8%) leading the decline, amid the crash of the market.
Despite the current adverse situation, Nomura upgraded Sands China to “buy” from “neutral”, maintaining its target price of the stock at HKD35
The research house said Macau stocks have fallen 20 percent on average in the past two weeks, and it sees a selective buying opportunity as the market has over-reacted to the moderate tapering in August month-to-date gaming revenues and the potential negative effect from RMB depreciation.
With industry growth visibility remaining weak, Nomura encouraged investors “to stay defensive and to stick with yield-play Sands China, which offers 7% FY2015 dividend yield.”
Stocks suffered massive losses at market opening yesterday in the U.S. following China’s market rout.
At press time, the S&P 500 was down 3.4%, joining the Nasdaq and Dow Jones Industrial Average in a correction. The benchmark index is now down 10.3% from its May record, crossing the 10% threshold indicative of a correction.
The Nasdaq slid 3.8%. The Dow suffered its biggest points decline since 2008, the beginning of the financial crisis, tumbling 3.5% or 579 points.
All casino operators in Vegas with Macau operations were taking a big hit too. MDT/Agencies
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