Friday, May 24, 2024

Macau Casino Stocks Jump as China Rolls Out New Travel Permits – BNN Bloomberg

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(Bloomberg) — Shares in Macau casino operators rallied on Monday after Chinese authorities introduced new travel permits in an effort to boost the city’s tourism.

Melco International Development Ltd. jumped as much as 14% in Hong Kong trading, the most since December 2022, while Sands China Ltd. rose 7.1% and Galaxy Entertainment Group Ltd. climbed 4.8%. A Bloomberg gauge of six Macau gaming operators gained as much as 3.7%. 

Starting May 6, mainland Chinese citizens will be able to apply for a permit that allows them to enter the world’s biggest gambling hub multiple times in a year, the National Immigration Administration announced Sunday. The permit allows visitors to attend exhibitions, seek medical care or participate in arts and entertainment activities.

China’s easing of travel measures comes at a time when Macau’s post-Covid recovery has lost some momentum, as consumers turn more cautious about spending amid an uncertain economic outlook. The city’s gaming revenue reached 81% of 2019 levels in December, but fell to 75% in March. 

These announcements “indicate that China’s government views Macau as the obvious and relatively preferred destination when it comes to gambling,” said JPMorgan Chase & Co. analysts including DS Kim, in a note Sunday. “We wouldn’t be surprised if the Chinese gambling demand will be increasingly ‘ring-fenced’ around Macau.” 

New multiple-entry permits are likely to boost tourist arrivals – crucial for the gambling hub – following Beijing’s crackdown on high-rollers which nearly wiped out the VIP sector that used to contribute half of the territory’s betting income. 

Those who join tour groups covering Macau and its neighboring mainland island Hengqin will also receive a special permit allowing them to travel between the two places multiple times within seven days, if they move together in a group, according to the announcement. 

“The mainland is fully supportive of Macau’s economy and travel and leisure industry,” the analysts added. The support is in contrast to China’s increasing scrutiny on cross-border or illegal gambling in places such as Singapore, South Korea, Sri Lanka, Philippines and Cambodia, they said. 

Other measures announced Sunday include faster permit processing and an extension of business stays to as long as 14 days from seven. 

READ: Macau Faces Beijing’s Ire on Gambling as Visits Surge Post-Covid

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