As Macau continues its entirely government-induced freefall, the broader Chinese stock market is breaking through highs not seen since 2008. All this while macro data in China comes in bleaker and bleaker, the latest being the HSBC Manufacturing PMI coming in at contraction levels, the lowest in a year and more ominously, the fastest drop in a year. Yet Chinese stocks, except Macau, keep going higher in a sort of twisted loop, as every bad data point adds to the assumption that the People’s Bank of China will print more money if the economy slows down too quickly. Bad news is good news, for now.

At some point soon this will break. And while searching for Macau alternatives is certainly not a bad idea, investors have to be prepared for turmoil in capital markets everywhere when the broader Shanghai index begins to fall. So yes, there are alternatives in Macau’s backyard that are slowly feeding off the artificial government-induced Macau drop, but they too will be affected, at least temporarily, by conditions in the People’s Republic.

Cambodia’s NagaCorp is slowly growing its VIP segment, quite nicely in fact, with fundamentals improving largely due to the Macau situation. But if you’re looking for quick sustained gains, Cambodia is not the best choice. An investment in NagaCorp should only be taken with 2020 in mind, scaled in slowly on down days. Try to get a good price and buy the dips. Don’t go chasing.

While NagaCorp’s numbers are good, certainly stellar compared to Macau’s, the environment is nevertheless not ideal. It has very little to do with Cambodia itself. NagaWorld is actually closed to native Cambodians and open only to foreigners. Strange business model perhaps, but it insulates the casino from fluctuations within the native economy almost entirely.  And it’s not even the monetary environment in Cambodia, since NagaCorp’s business is mostly disconnected from the actions of Cambodia’s central bank. Expenditures and income are mostly in US Dollars with a bit of Rubles on the side.