Casinos see shares rise after Beijing’s stimulus

Macau’s casino operators continued to see significant gains yesterday, following the Chinese government’s announcement of a major stimulus package to revitalize the economy.

Shares of the six casino concessionaires rose from 2.32% to 12.77% by the end of trading on yesterday, while Tuesday rose between 2.4% and 6.65%

On Tuesday, China’s central bank unveiled what analysts are calling its most substantial stimulus since the pandemic began.

The measures include increased funding, interest rate cuts, and a reduction in the banking system’s reserve ratio.

This initiative aims to bolster confidence in the economy, which has faced numerous challenges over recent months.

The stimulus package also features cuts to the benchmark interest rate and reductions on existing mortgage rates, alongside providing liquidity to brokers and insurance companies.

Following the announcement, Chinese stocks and bonds rallied, with Asian markets hitting a two-and-a-half-year high.

The yuan also strengthened, reaching a 16-month high against the U.S. dollar.

Brokerage Seaport Research Partners noted the new monetary policies are likely to enhance sentiment surrounding both China and Macau.

Analyst Vitaly Umansky said that while the immediate effects on Macau revenue may be limited, sustained stimulus could lead to improvements in the Chinese economy over the medium term, according to a GGR Asia report.

Umansky said a stronger recovery in gross gaming revenue (GGR) would be crucial for Macau’s market in 2025, driven by improving economic conditions and consumer sentiment.

He expects premium mass gaming will continue to fuel growth, but that base mass strength could result in better-than-expected revenue growth.

In a recent memo, Seaport revised its September GGR estimate for Macau down to MOP16.75 billion, citing a decline as the month progressed.

However, it forecast October GGR to reach MOP21.5 billion, a 10.3% year-on-year increase, aided by strong hotel bookings during the upcoming Golden Week from Oct. 1 to 7.