Weak yuan ‘manageable’ risk for Macau casino operators

China’s yuan devaluation against the U.S. dollar remains to be a short-term problem for operators in Macau, unless of course, there’s an economic collapse.

Dan Wasiolek, senior equity analyst for investment research firm Morningstar Inc., said Nevada-based Wynn Resorts Ltd, Las Vegas Sands Corp. and MGM Resorts International were forecast to receive 62 percent, 55 percent and 27 percent, respectively, of their earnings for 2015 before interest, taxation, depreciation and amortization in Macau.

“Currency may present a near-term sentiment overhang in the shares, but barring an economic collapse, we see the yuan devaluation as manageable for the Macau operators,” Wasiolek wrote in the Morningstar website on Monday.

Wasiolek explained that U.S. operators are not affected—for now, at least—with the weak yuan since sales and expenses in Macau are denominated in pataca (MOP), which is pegged to the Hong Kong dollar.