Midwestern Blues

It looks like Stanley Ho’s IPO is moving ahead as planned, with the price range set for somewhere between HK$3.08 and HK$4.08 per share. It’s a bad time in the region for an IPO, with several noteworthy examples of recent IPOs trading downward — including the disastrous IPO of Chonqing Machinery and Electric, which lost about 30% since the IPO about a month ago. Trading is scheduled to begin on July 10, the results should be interesting to watch.

Real estate conferences should be held in places that are actually places where you can still make money on real estate, and such locations are increasingly in short supply. CoreNet Global, a global corporate real estate association, accordingly decided to hold its 7th Annual Asia Summit next March at the Venetian Macao, noting Macau’s “robust economy” and “booming commercial property market.” This is just one of many indicators that Macau continues to do well while the rest of the world suffers from recession. Certainly here, back in the Midwestern United States on the other side of the world, property values continue to go down and unemployment’s skyrocketing. I wonder if I could get ol’ Stanley to build a casino here in northern Indiana, and send some of that Eastern prosperity over here? No? I guess I’ll have to make another trip to Macau soon so I can avoid soaking up too much of the Midwestern economic funk by osmosis.

But investors and enterprises in Macau have no such worries, and the Statistics and Census Survey announced this week that the unemployment rate for March-May 2008 remains at 2.9%, which it has been for the past 7 periods. But is the grass greener over there? Probably, but given the state of the domestic auto industry here and the number of layoffs, that’s not really setting the bar too high. Every now and then there is still a sour note in Macau’s economy. An Associated Press article today noted that MGM Mirage shares dropped to a 3-year low yesterday, after KeyBanc Capital markets changed its rating from “Buy” to “Hold.” Most of the reason for the change in MGM shares is attributed to the recessionary economy, high fuel costs, and many problems in the Las Vegas side of the equation, including reduced airline capacity into Las Vegas. And while we can blame most of MGM Mirage’s drop on the Las Vegas economy, the KeyBanc analyst also noted that revenues and growth in Macau are also not as strong as Wall Street had expected.