Reports of credit clampdown overblown, analysts say

    The reports of a clampdown in illegal money transfers in Macau that triggered a major selloff in all of the major casino stocks this week may be overblown, analysts said. The report in the South China Morning Post said China UnionPay (CUP) terminals were being used illegally in Macau to circumvent China’s foreign exchange controls. UBS said authorities are involved in an ongoing effort to stamp out abuse of the machines, rather than launching a major crackdown. It also said it’s far more common for players to use the CUP terminals to obtain cash through purchasing goods in watch & jewellery shops, done through properly registered Macau CUP terminals. According to various operators and local sources, there have been no policy changes in that activity, UBS said. We estimate the second method accounts for 10-15 percent of mainland mass players’ sources of cash. Sterne Agee agreed. “While a tighter focus on cross-border point-of-sale relocating could result in additional targeting, our contacts suggest – and we agree – it is very doubtful we see a noticeable disruption to mass GGR from this,” it said.