Casino Stocks Jumps After China Eases Macau Border Restrictions
Restrictions in travel between China and Macau were imposed during the height of the deadly virus’s spread in the region. Restrictions were lifted when the number of infections in Macau went back to zero. Authorities in Macau reported that the sole carrier of the virus on Friday, a 57-year-old male Macau resident returning from the Philippines, was discharged from the hospital.
The 46th coronavirus case was quarantined at the Grand Sheraton Macao when he was diagnosed with the disease. On July 13, authorities in the Guangdong province of China announced that starting July 15, travelers from Macau, the world’s biggest gambling hub, no longer needed to undergo a 14-day quarantine.
Stocks surged as investors hope for a quick pickup on demand
Wynn Macau saw an increase in market value by seven percent during the late morning trade on Tuesday, while MGM China gained 5 percent during the same period. However, the stocks declined by 25 percent and 21 percent, respectively, from its value last year.
DS Kim, the analyst at JP Morgan in Hong Kong, said that they expected fast recovery of demand from Guangdong to nearly 70 percent of pre-coronavirus levels. However, Stanford C Berstein analyst Vitaly Umansky projected challenges in travel in and out of the Chinese territory.
He said that people visiting Macau from places outside Guangdong might find it difficult to travel since they would need to stay in the Chinese province before they are allowed to go home. They should expect strict rules on travel.
Macau has no new records of infection
Visitors from Guangdong correspond to 50 percent of the total Chinese visitors to the gambling hub.
Macau reported no case of the novel coronavirus within 100 days, and all of its cases are now out of danger.
Hong Kong, another claimed territory of China, has had no legal casino operations, but it allows marketing of land-based casinos and online casinos in Macau. Hong Kong recently imposes new strict novel coronavirus because of the continuing spread of the disease. Hong Kong reported a significant increase in the number of new cases and services of ferries, and Macau was canceled.
The novel coronavirus continued spreading in Asia and other parts of the world. Currently, more than 14 million people got infected globally, stealing away the lives of more than half a million. China reported more than 83,000 cases, with more than 4,600 deaths.
The spread of the virus affected casino operations around the globe. Many casinos reported a massive amount of losses in revenue because of the travel restrictions and lockdowns imposed by governments. Many casinos resumed operations starting May in the hope of recovering their losses during the lockdowns.
However, limitations in operational capacity and funding of novel coronavirus initiatives cut the casinos’ revenue in large parts. Many believe that it would take time for the gambling entertainers to recover its pre-coronavirus levels.
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