Dow Jones Newswires: Macau casino stocks jump after new draft law on licenses is less onerous than feared


Macau casino stocks jumped Monday as investors welcomed a new draft law for the industry that was milder than initially feared.

Sands China Ltd. 1928, +15.45% rose 15%, Wynn Macau Ltd. 1128, +9.77% added 11% and Galaxy Entertainment Group Ltd. 27, +8.20% gained 6.9% in morning trade. Their smaller peers Melco International Development Ltd. 200, +8.11%, MGM China Holdings Ltd. 2282, +12.13% and SJM Holdings Ltd. 880, +5.02% added 5.8%-11%.

The gains also followed a strong performance Friday in U.S.-listed stocks of casino operators that have businesses in Macau. Las Vegas Sands Corp. LVS, +14.15% gained 14% and Wynn Resorts Ltd. WYNN, +8.60% rose 8.6%. Shares of both companies fell sharply last year.

The new draft law, unveiled Friday by Macau’s cabinet, would grant a maximum of six casino licenses, alleviating fears that some casinos’ license renewals might be at risk. It also dropped an earlier provision to require government representatives to be placed in casinos to monitor their operations more closely.

The bill, which will go to lawmakers for deliberation, cut the tenure for new casino licenses in half and said operations must align with China’s national-security needs.

Analysts said the moves collectively dispelled fears of a worst-case scenario for casino operators in the gambling hub.

“We were surprised the government’s stance on some contentious topics has become far less onerous, if not surprisingly accommodative,” JPMorgan said in a note. It pointed to unchanged taxation and no plans to restrict dividend distributions.

JPMorgan has an overweight rating on Sands China, Galaxy Entertainment, Wynn Macau and MGM China, with the first two as its top picks.

U.S. bank Jefferies said in a note that it expects licenses to be renewed for all six concessionaires in Macau. The next stage of the industry’s recovery will depend on government policies to ease travel restrictions amid sporadic Covid-19 outbreaks, it said.

Novak Djokovic arrives in Dubai after deportation from Australia

Previous article

First-time home buyers are selling crypto to fund down payments — here’s what to know before you do it

Next article

You may also like


Leave a reply

Your email address will not be published. Required fields are marked *

More in News