ONE person's profit downgrade is another's buying opportunity. The fund manager Perpetual is steadily building its stake in Downer EDI, posting its latest increase to 7.6 per cent on Monday.

It was the third notice since the beginning of last week, lifting its stake from 5.2 per cent.

Downer EDI, you will easily recall, has had a bit of a shocker of late, buffeting the market at two consecutive annual results with surprise write-downs on poorly performing contracts.

Then, when Brent "new broom" Waldron stepped in as chief executive, his first quarterly presentation at the AGM included, on page 23 of a 25-page presentation, a profit downgrade.

Nevertheless, Waldron is persuasive about having a long, hard look at where Downer EDI is getting its value in a continuing strategic review conducted by UBS.

And Perpetual always has a keen eye for the main chance, although its investment in RAMS was a shocker.

Flog off a few bits, make a few capital returns, start performing like a company that is well and truly exposed to a "stronger-for-longer" resources-and-infrastructure boom; it's easy to see the appeal.

As long as there are no more downgrades. Downer EDI closed at $5.03 yesterday - still much closer to its year-low of $4.74 than its high of $7.85.

Leighton looks good
Leighton Holdings' recent share price run is sure to gain some support from predictions that the non-residential construction boom across Australia shows little sign of slowing.

Shares in Australia's largest construction group and mining contractor have risen more than 45 per cent since late July. The rise has been helped by the company attempting to expand its operations into India and the Middle East. But the strength of the Australian market has supported the contractor.

The sentiment was further helped yesterday when the latest Australian Industry Group-Australian Constructors Association survey, for last month, predicted that the amount of construction work conducted in Australia would rise 10.8 per cent this year, and by 7.4 per cent in 2008-09, when construction work is expected to hit a record $82 billion - more than double its 2003-04 value. No doubt the pledge by the Federal Government (and the opposition) to pour billions of extra dollars upgrading the country's infrastructure helps. Especially for a company whose only other bidders for major road contracts are its own subsidiaries.

Another winner from the strength in construction work is sure to be Kerry Stokes's equipment hirer National Hire, which wrapping up its takeover of Coates Hire.

Backing Stanley
Deutsche Bank is talking about backing the $US1.5 billion ($1.7 billion) float of the Macau casino company Sociedad de Jogos de Macau.

If the name means nothing to you, Sociedad de Jogos de Macau is run by Stanley Ho, the Macau casino tycoon who had meetings with the NSW Premier, Morris Iemma, in June last year, just when the State Government was renegotiating the Star City licence with Tabcorp.

It is the oldest player in Macau, having had a monopoly for 40 years until the market was opened in 2002.

There is also a link, through Stanley's son Lawrence, to James Packer, who is Lawrence's joint-venture partner in Macau through Melco PBL.

The float of Sociedad de Jogos de Macau has been on hold for the past year because of a legal dispute between Stanley and his estranged sister Winnie.

The big question: why have things suddenly cleared up?

Deutsche Bank's backing would help the progress of the IPO, but bankers fear that Winnie Ho could still block the listing.

The second issue relates to reputational risk.

It is understood a number of merchant banks have shied away from the deal, given allegations that Sociedad de Jogos de Macau has been linked to the seedier side of Macau.

Stanley Ho earlier had to sever his board links with the Hong-Kong listed Melco International Development.

Ho snr's involvement could have caused problems for Packer as regulators did probity checks when PBL linked with Melco.

Brands returning
If eating in the joint is not enough, you will soon be able to stay overnight, and gamble, in the latest incarnation of branded global restaurant chains.

Following the lead of the fashion brands Versace, Armani and Bulgari that have migrated into hotel and property sectors, so too are chains such as Hard Rock Cafe and Planet Hollywood.

In January the Hard Rock Cafe chain said it was setting up a hotel at the soon to be built City of Dreams Casino in Macau, owned by Melco PBL. Until now, all of Hard Rock's casino resorts have been in the US, where it has four such developments.

A former Hard Rock employee, Robert Earl, now a successful entrepreneur, is behind the relaunch of Planet Hollywood in Las Vegas. At its height the restaurant chain had a market cap of $1 billion. It went bust at the end of the 1990s. But it has re-emerged from the ashes to open a casino and 3000-room hotel in Vegas.

edited by Vanda Carson

xchange@smh.com.au