Macau Casino Stock Surge After Guangdong Visa Restrictions Eased

Visa restrictions for Chinese residents of the Guangdong province are easing from August 12. This is the first positive news in months for Macau’s casino industry.

Guangdong is the most populous region in all China. More than 104 million residents live there, according to the 2010 census. This accounts for almost 7.8% of Mainland China’s population. The special administrative region of Macau falls under the province of Guangdong.

The ongoing COVID-19 pandemic has caused havoc with Macau’s casino and hotel industries. Casinos in Macau closed for several weeks in an attempt to keep the coronavirus under control. They re-opened briefly before locking down again.

China imposed strict travel restrictions on its residents. Nobody was allowed to enter or leave mainland China. This included the short from within the Guangdong province to the gambling capital of Macau.

The lack of footfall has seen Macau casinos’ revenue and, therefore, profits decimated. Galaxy Entertainment Group is one of the biggest casino operators in Macau but it is felling the pinch. Analysts consider Galaxy to be the casino in the healthiest position financially in all of Macau. It’s a good job this is the case because it is losing $4.02 million a day.

These huge losses are because of the restrictions between Guangdong and Macau.

July 7 Was The Date Guangdong Should Have Reopened

Restrictions were meant to ease on July 7 but that never happened. A so-called travel bubble was expected to allow travel to Macau from Guangdong. July 7 came and went but there is light at the end of the tunnel.

The restrictions are easing on August 12 following an announcement today. Zhuhai residents are invited to apply individual and tourist visas that allow travel to Macau. It’s a slow start but analysts from Sanford C. Bernstein say the whole Guangdong province will be free to travel to Macau by the end of September.

There are also still hopes of reimplementing the Individual Visit Scheme. This allows visitors from 49 Chinese cities to return to Macau.

Zhuhai residents only make up a small percentage of Macau’s visitors each year. The whole Guangdong province, however, makes up a staggering 46% of annual visitors. Those visitors make up 20% of VIP revenue and 30% of mass-market revenue. You can see why casino executives are keen for Guangdong to fully open.

Hong Kong Forced To Wait For Its Macau Return

Gamblers from China’s other special administrative region (SAR) make up a large chunk of Macau’s revenue. Hong Kong residents travel to Macau in droves and spend astronomical sums of money.

Hong Kong’s residents are still not permitted to head to Macau and won’t be for some time. A new wave of COVID-19 is battering Hong Kong so travel restrictions remain in place. Macau’s government will ease them, although not until new confirmed infection numbers continually fall.

Hong Kong-listed casino companies are already seeing the benefit of the news. Investors in these casino stocks reacted positively and began snapping up shares.

Wynn Macau Ltd shares jumped the most, increasing by 6.9%. Sands China Ltd’s share price gained 6.7%. MGM China Holdings soared by 5.9%.

SJM Holdings is another casino company seeing its share price increase. Shares rose from HK$9.69 per share to $10.24 per share, an increase of 5.68%. SJM needs some good news right now because it’s a company in turmoil.

Founder Stanley Ho died earlier this year. Ho was 98-years-old and hadn’t worked since 2018, but he was the company’s talisman. Several members of his family are set for a legal battle for Ho’s AUD$8.81 billion estate. The Ho Family is usually embroiled in a feud of some sorts, but this one will be serious.

Pansy Ho wants a say in how her late father’s estate is divided. Some believe she wants to take over the reins at SJM. She faces fierce competition from sister Daisy Ho who is yet to break her silence. That won’t take long, watch this space.