Don't Panic About Macau, Focus On These Casino Stocks
Zacks Investment Research | Dec 09, 2016 03:50AM ET
Things had just started to look better for the casino industry with the mecca of casino gaming – Macau – slowly returning to life. Gaming revenues in the region grew on an annual basis in November to register four consecutive months of gains, following the extended slump of over two years.
However, a recent report by South China Morning Post, stating that the Chinese government is apparently planning to cut the amount of money people can withdraw from China UnionPay ATMs in the gaming region, has once again hit the Macau-focused stocks hard. Reportedly, effective Dec 10, the daily withdrawal limit will be halved from 10,000 to 5,000 patacas (or about $1.25 billion to $626 million).
Consequently, share price of casino companies, Wynn Resorts Ltd. (NASDAQ:WYNN) , MGM Resorts International (NYSE:MGM) , Melco Crown Entertainment Ltd. (NASDAQ:MPEL) and Las Vegas Sands Corp. (NYSE:LVS) dropped in yesterday’s trading session, as Macau is a key operating region for these companies.
Investors are thus clearly fretting over the new intervention from government officials and believe it could prove to be a roadblock for the Macau gaming region. They also fear that the region’s revenues will once again come under pressure.
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