GGRAsia – Macau op shares surge on mainland tour, e-visa resumption

Macau op shares surge on mainland tour, e-visa resumption

Sep 26, 2022 Newsdesk Latest News, Macau, Top of the deck

Stocks of Macau casino operators rose in the Hong Kong market on Monday, following the weekend announcement that group tours from mainland China and electronically-issued individual exit visas from the mainland to Macau could resume as soon as the end of October.

By the close of Monday trading in Hong Kong, shares associated with all six casino operators rose, with Sands China Ltd experiencing the sharpest increase, at 15.7 percent. SJM Holdings Ltd rose by nearly 11.6 percent, and Wynn Macau Ltd saw its share price jump 11.1 percent.

Galaxy Entertainment Group Ltd rose by 7.2 percent at the close of trading on Monday. Melco International Development Ltd, the parent of U.S.-listed Melco Resorts and Entertainment Ltd, saw its share price increase by 5.3 percent, while MGM China Holdings Ltd rose by 4.7 percent.

Macau’s Chief Executive, Ho Iat Seng, had said on Saturday there was hope that daily visitor volume from the mainland could rise to 40,000 after the easing, which might start either in late October or early November. Priority would be given to resumption of tours involving residents from the Guangdong, Zhejiang, Jiangsu and Fujian provinces, and the city of Shanghai.

Macau’s tourism industry has been hammered by a start-stop pattern of trading since the onset of the Covid-19 pandemic in early 2020.

A Sunday note from JP Morgan Securities (Asia Pacific) Ltd described the measures outlined by Macau’s Chief Executive as “great news” and a “path to normalcy”.

“We believe the resumption of eVisa and group tours should alleviate friction for a Macau trip, as well as signal to many that it’s okay to visit Macau, in turn boosting demand into the year-end holidays and 2023. Finally, we feel we can talk about a return to normalcy,” wrote analyst DS Kim.

The brokerage also said that in the fourth quarter, most Macau casino operators could potentially return to positive earnings before interest, taxation, depreciation and amortisation (EBITDA) thanks to the easing of travel restrictions between Macau and the mainland.