The equity market volatility created as the legacy from last year’s global credit crisis was still in evidence recently when the price of shares in Sands China yo-yoed violently in the space of a few days following the unit’s late November flotation in Hong Kong.
The stock in the Las Vegas Sands Corp local unit, launched at an offer price of HKD10.38, took a 10.2 percent dip on the first day of trading. Ten days later it bounced back 5 percent to reach HKD10.02 on news of a 59 percent year on year rise in Macau’s November gross gaming revenue. That meant a net loss over the period of 3.5 percent.
Neither market movement looks especially rational, suggesting investor confidence is generally still fragile and that the market continues to be easily spooked. Some analysts insist Sands China was aggressively priced in relation to its underlying debt burden. Others suggest general nervousness about real estate in emerging markets linked to the debt scheduling troubles of Dubai World may have contributed to the Sands China fluctuation.
“We are not in business for tena minutes, we are in business for decades,” LVS Chairman and Chief Executive Sheldon Adelson told journalists in Hong Kong at the time of the IPO launch.
LVS is expected to restart its work on Cotai plots five and six in Macau in the New Year with some of the proceeds from its recent debt and equity raising drive, which netted USD5 billion. That included USD2.5 billion from the local IPO and USD600 million from pre-IPO financing.
Construction of the 13.3 million square foot Cotai complex—which the company says is 65 percent complete—was halted a year ago when LVS came under heavy pressure on its debt repayment schedule.
LVS said development would be finished in phases. Phase one is expected to open in June 2011 with 3,700 hotel rooms and suites under the Shangri-La, Traders and Sheraton hotel brands.
The second phase, planned for December 2011, will house a 2,300-room Sheraton hotel tower. Timing for completion of a third phase, to include a St. Regis hotel and serviced apartments, has yet to be announced.
