$24b wipeout of Macau stocks on news of curbs

24b wipeout of macau stocks on news of curbs

Sumary of $24b wipeout of Macau stocks on news of curbs:

  • HONG KONG • Macau’s top gaming stocks lost a record US$18 billion (S$24.2 billion) in combined market value yesterday, after officials said they would change casino regulations to tighten restrictions on operators, including appointing government representatives to “supervise” companies in the world’s biggest gaming hub.
  • The Bloomberg Intelligence index of the six big casino operators fell a record 23 per cent.
  • American operators saw the worst sell-offs, with Sands China sinking as much as 33 per cent, while Wynn Macau plunged 34 per cent, the steepest declines each had ever experienced.
  • Dismay rippled through industry players and analysts after the announcement as China’s ongoing clampdown on sectors from gaming to after-school tutoring appears to have reached Macau at last.
  • “The casino issues are a continuation of what’s been a pretty big crackdown,” said Mr Jason Ader, chief executive of New York-based investment manager SpringOwl Asset Management and a former Las Vegas Sands board member.
  • Gaming revenue for last month was 82 per cent lower than for the same period in 2019. Among the items officials discussed in a press conference on Tuesday were tighter controls on the distribution of dividends, greater participation by locals in the concessions and government representatives directly overseeing the businesses, Mr Kim noted.
  • Amid a wider effort to discourage casino gaming, Beijing has also cracked down on organised gambling trips to Macau and other overseas destinations organised by junket companies, which service high-rollers and extend them credit.
  • Casino operators catering to high rollers may “face greater pressure to hedge their bets, invest more in non-gaming attractions and work harder to woo the premium mass market”, according to Bloomberg Intelligence gaming analysts Angela Hanlee and Kai Lin Choo.

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