A week after plummeting 26% and losing more than US$18 billion in value in the space of just 24 hours, Macau’s gaming stocks showed some signs of recovery on Tuesday after the Gaming Inspection and Coordination Bureau (DICJ) held its first consultation with operators over proposed changes to the gaming law.
At market close Tuesday, the market capitalization of the Hong Kong listed entities of Macau’s six concessionaires had climbed 4.3% from last Thursday’s low day-end close of HK$392 billion (US$50.3 billion) to HK$409 billion (US$52.5 billion), although that figure was still well down on their combined market cap of HK$549 billion (US$70.6 billion) before last week’s announcement. The best performers yesterday were MGM China which rose by 7.14% to HK$5.85 and Wynn Macau, which rose by 5.42% to HK$6.22.
As previously reported by Inside Asian Gaming, investors had been spooked by some of the finer details of proposed gaming law amendments, which may include shorter licensing terms than the current 20-year term due to expire for all six on 26 June 2022.
The proposed amendments also include a government representative being appointed to a role within each gaming concessionaires to directly supervise operations, possibly in a boardroom capacity; the power for government conduct reviews on any hired personnel of gaming concessions, junket operators and associated companies to ensure they are suitable persons, irrespective of whether or not they are considered “key employees”; and a requirement for government approval before any dividends can be paid.
However, the DICJ hinted that investor interests were also front of mind during Monday’s consultation with operators, stating that it will consider both Macau’s employment market and ROI for investors in determining the length of new licenses to be issued.
That news alone appears to have given the market more confidence.
Shares in Galaxy Entertainment Group rose 3.5% on Tuesday to HK$41.75, up from a 7-day low of HK$38.10, Sands China by 3.98% to HK$15.68, Melco International Development by 4.5% to HK$9.81 and SJM Holdings by 2.42% to HK$5.50.
Shares in Melco Resorts, listed on the NASDAQ, fell 3.0% to US$10.04 but are up from a 7-day low of US$9.81.
Investors will no doubt be watching closely when the Macau government holds the first of four consultation sessions with the public on 29 September, with the remainder to be held on 9 October, 13 October and 19 October.