Big six shares on a continuous decline ahead of Beijing’s party congress
The city’s big six shares are in free fall at the Hong Kong Stock Exchange, with Sands China and Wynn Resorts leading the plunge with a 7.5% and 6.39% drop, respectively.
The casinos’ stocks are in turmoil and have been plunging since Monday, a week ahead of the 20th National Congress of the Chinese Communist Party, which will commence Sunday.
SJM Holdings was the only operator not in the red, with a slight uptick of 0.78%.
MGM China, Galaxy Entertainment Group and Melco International Development also recorded drops of 3.71%, 2.16% and 1.95%, respectively.
On the first day of trading opening this week, shares of the US-listed Macau casino stocks in New York were markedly lower, with Wynn leading the decline, falling 11%. Las Vegas Sands fell 7.2%, while Melco Resorts & Entertainment was down 6.1% and MGM Resorts International fell 3.7%.
In the HKSE the next day, MGM China plunged 5.34%, followed by Wynn Macau and Sands China with drops of 4.45% and 4.47% respectively.
“I believe the drop is a result of both a plunge in the Hang Seng Index combined with China’s continuing of their zero-Covid strategy,” Ben Lee, managing partner of IGamiX Management & Consulting, told the Times.
The sector, which is in turmoil, continues to face headwinds, particularly due to emerging Covid-19 cases in the neighboring region.
In a Bloomberg Intelligence’s video yesterday, Angela Hanlee, Bloomberg Intelligence Analyst on APAC Gaming and Hospitality Research, has reiterated that forecasts for the city’s gross gaming revenue (GGR) for the year 2022 will not be altered.
“We keep our expectation unchanged that gaming revenue this year will reach just 20% of pre-pandemic levels, although these easing travel restrictions are boosting sentiment for Macau casino stocks that suffered for the last three years,” she said.
Although the city has recorded a significant uptick in visitors with the recent National Day Golden Week, exceeding the government’s expectations with over 30,000 arrivals on the first day, per head spending remains a question mark given the worsening consumer power in China.
In China, the sluggish consumer spending has dragged its economy down, with little relief anticipated for the months ahead.
