Macau Records Rise of Casino Stocks

China lifted the quarantine banning travels to Macau region. Not long after that, Macau’с casino stocks rocketed to their highest level in almost two and a half months.

Macau hasn’t lifted the quarantine rule fully on visitors from China but only gradually, since the last China city was deemed low-risk for transmission on the coronavirus with no new clusters in the country. According to Bloomberg, the lift of such measure was exactly the reason for the rising stocks phenomenon in Macau.

Galaxy Entertainment Group rose as much as 12%, the most since March 2020, while Sands China Ltd. rose as much as 10%, its biggest gain since December 2018. MGM China Holdings Ltd., Melco International Development Ltd., and Wynn Macau Ltd. meanwhile all saw shares rise around 9%.

Bloomberg Intelligence analyst, Angela Han Lee said: “Easing quarantine policy between mainland China and Macau could provide a ground for foot traffic improvement for Macau casinos.”

She added: “We now need to watch how the mainland’s policy toward overseas gambling is in March as it does not want Macau to become an infrastructure facilitating that.”

Higher Revenue in January

Macau casinos reported gross gaming revenue of MOP8.02bn (US$1.0bn) for January 2021, a 64% decline from the prior-year period, but a 3% rise from December 2020.

In the middle of the coronavirus pandemic, last year, Macau casinos registered the lowest revenue.

Due to the coronavirus outbreak and the measures taken by Mainland China to contain the spread, in February Macau’s gross gaming revenue plummeted 87.8%.

Macau’s 41 casinos generated MOP3.1 billion (approx. $386.7 million) in January of 2020. The February figure was worse than analyst expectations of an 80% drop.

The city’s gambling venues generated MOP25.37 billion in February 2019. The annual drop recorded last month was the steepest since casino gaming was introduced in the Special Administrative Region, which is the only place in China where casinos are legal.

One of the strictest measure that resulted in low revenue was the closing of casino facilities.

The 41 casinos in Macau were ordered to shut down in February last year. At the end of the same month, many of them reopened but still had to operate with half of their capacity and under heavy restrictions.

The drop of revenue continued in March and April and only at the beginning of this year, Macau facilities can take a break of fresh air.

Now that the china quarantine is lifted and the restrictions are not that heavy, Macau casinos can enjoy the rise of stocks.

Source: “Macau casino stocks rise after lifting of China quarantine”, Gambling Insider, February 23, 2021

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