Macau casino stocks soar after new license granted

Macau gaming shares surge on Monday as China’s gambling hub Macau struggles to overcome pandemic controls after the government announced plans to grant new licenses to Macau’s existing casinos It gave reprieve to the industry in which it was.

Among the Hong Kong-listed divisions of US casino groups, Wynn Macau By late Monday afternoon, MGM China Holdings was up 13% and Sands China was up 8.4%.

The announcement provides reassurance to investors worried about China’s growing hostility to gambling after two of Macau’s biggest gambling promoters were arrested late last year. Alvin Chow and Lebo Chan.

The two, who are incarcerated on illegal gambling charges, represented the city’s largest ‘junket’ that attracts high rollers to the casinos. Their arrest was part of a broader crackdown on the sector by Beijing.

“Many investors, especially long-only investors, have shied away from the sector because of this ‘tail risk,”’ said DS Kim, a sector analyst at JPMorgan. “But this is great news. He has one of the biggest overhangs in recent years removed.”

but, macau Analysts continue to be impacted by China’s stringent pandemic restrictions, but border controls have stopped the influx of gamblers over the past three years, so operators have had to take on heavy debt to keep their businesses afloat. He said the pain was likely to continue.

“The resurgence of COVID-19 in China is again slowing the market recovery and hurting credit,” said Gloria Tseng, senior credit officer at Moody’s.

Macau said on Saturday that its six existing casino concessionaires will be provisionally allowed to operate for another 10 years from January, though final details have yet to be worked out.

“The final award for .

Local operators Galaxy Entertainment, Melco Resorts & Entertainment and SJM Holdings, run by the family of Macau gaming magnate Stanley Ho, were also among the government-extended license holders.

An application for a Macau-registered entity related to Malaysian tycoon Lim Kok Thai conglomerate Genting Malaysia Berhad has failed.

Visitors to Macau are still subject to quarantine and the outbreak could lead to a lockdown. One of his MGM China facilities in the city was shut down in his October. Macau casino stocks soar after new license granted

Exit mobile version