Institutional investors sell Sands China stake for LVS

    Waddell & Reed Financial said its funds are selling all their holdings in Hong Kong-listed Sands China in favour of a stake in Las Vegas Sands, saying the parent company has greater liquidity.
    The funds included Ivy Asset Strategy Fund, Waddell & Reed Advisors Asset Strategy Fund and Ivy Funds Asset Strategy VIP. They now hold about 16,963,601 shares in LVS, according to a statement.
    The funds sold 192.64 million Sands China shares at HK$55.45 each, raising about $1.38 billion. The sale price represented a discount of 4.8 percent to Tuesday’s closing price.
    Sands China shares closed down almost 2 percent in Hong Kong trading at $57.15, though they recovered from an intraday low of $56.00.
    The managers said they continue to have a positive view on the investment outlook of Las Vegas Sands and its ability to generate revenue in China and elsewhere around the world. As a result of this transaction, Las Vegas Sands is one of the largest holdings in the Asset Strategy portfolios.
    The funds, while remaining positive on Macau favoured the greater exposure to other regions offered by the parent company. LVS has properties in Singapore and will seek a license in Japan should that market be opened up. At home, revenue in the U.S. is also beginning to improve.
    Sands China makes up about 60 percent of overall group profit at Las Vegas Sands. In the first quarter, Sands China revenue increased 34.7 percent to $2.72 billion, outpacing growth in overall group revenue, which rose 21.4 percent to reach $4.01 billion.
    LVS shares were also slightly weaker Wednesday, in line with declines in the overall U.S. indices.
    Analysts remain bullish on the prospects for the Macau market. Deutsche Bank continues to forecast gross gaming revenue will double by 2021 to $100 billion, while Goldman Sachs in a 56-page report on Asia’s gambling jurisdictions said Macau remains its top pick.
    However, stock market investors have become more wary, especially given high valuations.