The value of individual shares in some of Macau’s largest casino operators reportedly improved significantly over the weekend on the back of news that the enclave is to maintain its current number of gaming concessionaires at six.
According to a report from the Financial Times newspaper, the government for the former Portuguese enclave ended last week by revealing that it is to offer a total of six firms the right to run casinos in the city under ten-year licenses. The source detailed that this revelation was welcomed by the territory’s current crop of operators as their existing 20-year authorizations are due to expire in June.
Macau is home to over 40 casinos operated by SJM Holdings Limited, Galaxy Entertainment Group Limited, Melco Resorts and Entertainment Limited, MGM China Holdings Limited and the local Sands China Limited and Wynn Macau Limited subordinates of Las Vegas Sands Corporation and Wynn Resorts Limited respectively. However, these companies will now reportedly be obliged to bid for the right to have their current licenses extended by a further ten years to 2032 although no details on how this fresh tendering process will run or when it is to take place have yet been released.
Nevertheless, the newspaper reported that the official government disclosure saw the value of individual shares in Wynn Macau Limited jump by some 9% over the course of Monday trading to approximately $0.96 while those for fellow Hong Kong-listed MGM China Holdings Limited and Sands China Limited rose by 11% and 14.6% respectively to $0.66 and $2.71. Numerous analysts purportedly divulged that these swells came because every one of the Macau’s six casino operators is now expected to retain their presence in what has quickly become the world’s most lucrative casino market.
The Financial Times reported that investor sentiments moreover improved due to the fact that Macau is not set to attach higher taxes or licensing fees to its coming crop of fresh authorizations and has dropped an earlier proposal that was to have seen concessionaires’ casinos obliged to host government observers. George Choi from Citigroup Investment Research purportedly declared that these latter moves ‘should remove most investors’ key concerns’ and install an overall clarity that was ‘the important positive catalyst for which we have been looking’.
Even after today’s rally, an index from the Bloomberg news service nonetheless reportedly put the individual prices of shares in the six Macau casino operators at about 50% of their late-2019 values. Ben Lee from local consultancy firm IGamiX purportedly pronounced that the licensing decision ‘provides some clarity in the short term’ but does not necessarily lead the industry to believe that it will be rapidly returning to the pre-pandemic hey-days of the last decade when aggregated annual gross gaming revenues hit highs of over $44 billion.