Tue, Sep 29, 2009 - Page 12 News List

Astro, Firich drop on casino referendum

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Astro Corp (泰偉電子) and Firich Enterprises Co (伍豐科技), ­gambling-related stocks, fell in Taipei trading after residents voted against a government plan to allow Taiwan’s first casinos in Penghu.

Astro, a software maker for arcade game machines, lost 7 percent to NT$73.4, the most since June 15, at the close on the Taiwan Stock Exchange. Firich Enterprises, a point-of-sale terminal maker that invested in a lottery business, slid 6.9 percent to NT$78.10, also the most since June 15. The benchmark TAIEX declined 0.8 percent.

Some 56 percent of residents voted against a plan to allow casinos on Penghu, the local government said in a press release on Saturday.

The poll may delay developers’ plans until at least 2012, when the law will allow a repeat referendum. AMZ Holdings PLC owns 11 hectares on Penghu and had planned to bid for a license as soon as the government sets up a regulator and gaming guidelines, the company said in January.

“Investors are disappointed with the result,” Andy Wei, who helps manage the equivalent of US$3.1 billion at PCA Securities Investment Trust Co (保誠投信), said in an interview yesterday.

“If it were passed, there could be a lot of business opportunities and may result in new gambling-related companies. We are now back to square one,” Wei said.

Taiwan legalized casinos in January on its outlying islands of Kinmen, Matsu and Penghu, pending approval in a referendum by local residents.

The government aims to boost tourism and lure gamblers from Macau as a global recession cuts into earnings from exports and slows domestic consumption. Casinos remain banned on Taiwan proper.

“You have to wait three years to get Penghu to go through another referendum, but you do have other outlying islands such as Kinmen, which is only 7 kilometers off the coast of mainland China,” said Sean Monaghan, an independent business consultant and gaming analyst.

“You’ve really got to expect the government to put in a lot more hard work in planning and communicating potential regulations. There is still an awful lot unknown for everyone,” he said.

Casino operators including Las Vegas Sands Corp are building gaming resorts in Asian cities such as Macau and Singapore, helping to boost the number of visitors and draw conventions and similar events.

AMZ said in January it plans to invest as much as US$300 million to build a five-star, 500-room resort on Penghu in order to win a casino license.

Taiwan’s economy will probably contract 3.52 percent this quarter after the economy slipped into its first recession since 2001. The nation’s jobless rate climbed a 12th straight month to a record high of 6.07 percent last month.

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