Odds in investors’ favour after coronavirus upends the world’s gambling capital of Macau, analysts say
- Casino stocks have been clobbered since the virus outbreak
- The few gamblers showing up must now wear masks as casinos slowly reopen after 15-day shutdown
Macau casino operators are down on their luck. But the coronavirus upending the world’s top gambling town could deal a winning hand to long-term investors.
Most analysts sound optimistic about casino stocks’ future, pointing out that their share prices have tumbled over the past five weeks because of the epidemic and the unprecedented measures taken to control its spread.
Before the virus made headlines, share prices of Sands China, Galaxy Entertainment, Melco International, and SJM Holdings were near 52-week highs, as phase one of the US-China trade deal boosted sentiment. But since the market’s close on January 17, Melco International has collapsed 23 per cent, Sands China has tumbled 14.4 per cent, SJM is off 12.5 per cent, and Galaxy has fallen 10 per cent.
The other two casino stocks, which had not been flying as high, have plunged as well: MGM China is down 22.4 per cent, while Wynn Macau is down 17.5 per cent.
In contrast, Hong Kong’s benchmark Hang Seng Index has slid just 6 per cent since January 17.
The Macau government shuttered the casinos beginning February 5 to contain the virus – and kept them closed for 15 days. Only once before had all of the gaming houses closed: In September 2018 because of Typhoon Mangkhut. And that was only for 33 hours.