Macau casino stocks shine in post-Covid rally as JPMorgan sees headroom for more upside
- Investors should look past losses in the final quarter of 2022 and bet on a post-Covid-19 recovery, according to JPMorgan, Credit Suisse and Jefferies
- Casino stocks rallied by 3 per cent to 9 per cent in Hong Kong on Thursday, outpacing the Hang Seng Index’s 1.6 per cent bounce
Shares of Galaxy Entertainment and peers including Sands China and MGM China climbed by 3 per cent and 9.2 per cent in Hong Kong on Thursday, outpacing the Hang Seng Index’s 1.6 per cent gain. A Bloomberg index tracking the six listed incumbent operators rose 4 per cent, the most in five weeks.
While it was only 46 per cent of the pre-pandemic volume in January 2019, analysts said the future is promising following encouraging signs of visitor arrivals during the Lunar New Year holiday last month as tourists returned to the world’s biggest gambling hub.
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Macau sees tourism rebound over Lunar New Year after easing of restrictions
“January GGR results have been a pleasant surprise to the market,” Kenneth Fong, an analyst in Hong Kong at Credit Suisse, said in a report earlier this month. Positive newsflow and improvement in revenue could lift sentiment and share price performance going forward, he added.
China eased its zero-Covid curbs from late November before officially scrapping the policy in early January. The swift reopening of the economy caught the market off guard, fanning a US$1.5 billion stock rally across Hong Kong’s equity market until the Lunar New Year holiday.