Casino stocks hit by visa worries
Casino stocks fell in Hong Kong yesterday after a newspaper report that Guangdong has extended the wait for Macau visas to a month. At present, it takes one to two weeks for residents of the province to get a Macau visa.
The Chinese-language Macau Daily News also said UnionPay had cut the maximum overseas spending limit by holders of its credit cards to one million yuan (HK$1.23 million), down from five to 10 million yuan. Many mainlanders use the cards to withdraw cash when they are abroad.
'Chinese visitors can go to Macau once every two months based on the regulations, but now, effectively, they can only come once every three months if you consider the extra application time,' Kenneth Fong, a JPMorgan analyst, said yesterday.
The Macau newspaper cited tourists as the source of the news, without giving their names. It could not be officially confirmed. BofA Merrill Lynch said it had contacted visa staff in Zhuhai, Guangzhou, Shenzhen, Foshan, Zhongshan, Fuzhou, Beijing and Shanghai, and 'based on their responses, we are not aware of any change in the visa application process or timing'.
Shares in Sands China slid 5.8 per cent to a more than five-month low, while Wynn Macau fell 2.8 per cent. The Hang Seng Index edged up 0.45 per cent from the previous day.
Macau gaming mogul Stanley Ho Hung-sun's SJM dropped 2 per cent, Melco Crown Entertainment lost 2.5 per cent, Galaxy Entertainment fell 5.7 per cent and MGM, 4.8 per cent.
'The news triggered a further sell-off in gaming stocks, which have already been weighed down by concerns over slowing economic growth in China,' said Chelsey Tam, an analyst at Emperor Securities.
JPMorgan's Fong said it was common for visa application times to vary, especially during peak seasons like the summer holidays, and more so during politically sensitive periods 'like the Hong Kong handover anniversary'. 'We believe this measure is likely to be temporary,' he said.
Macau is the world's biggest gambling destination, making revenue almost six times Las Vegas' last year.
Nearly this proportion of the 28 million travellers to Macau last year were from the mainland