Sands China leads rally in gaming stocks after Macau keeps licences at six (updated)

LET group

17/01/2022 03:11

(Adds details, milestones, analysts' comments and updates share
 movements)
    HONG KONG, Jan 17 (Reuters) - Sands China Ltd  1928.HK  led
a rally in gaming stocks on Monday with shares surging as much
as 22.3% in their biggest daily percentage gain since October
2011 after Macau, the world's largest gambling hub, retained
casino licences limit to six.
    Shares of Sands China jumped to HK$22.40, their highest
level since Sept. 14, compared with a 0.8% decline in the
benchmark Hang Seng Index  .HSI .
    Wynn Macau  1128.HK  jumped as much as 19.1% in its best
intraday session since October 2011. The stock shed early gains
to trade up 9.2%, as of 0230 GMT.
    Macau's government announced on Friday that the number of
new casino operators allowed to function in the world's largest
gambling hub would be limited to six with an operating period of
up to 10 years.  urn:newsml:reuters.com:*:nP8N2TS00A 
    The regulatory announcement provides new clarity and should
remove most investors' key concerns such as dividends,
government oversight, minimum shareholding by a Macau permanent
resident, and gaming tax, Citi said in a research note.
    The former Portuguese colony is the world's biggest gambling
hub in terms of money wagered.
    Macau massively tightened scrutiny of casinos in recent
years, with authorities clamping down on illicit capital flows
from mainland China and targeting underground lending and
illegal cash transfers.
    Citi raised target prices on the six Macau casino operators
by 8%-14% following the government's clarification on the
revisions in gaming law.
    Shares of Galaxy Entertainment  0027.HK , MGM China
 282.HK , SJM  0880.HK , and Melco  0200.HK  rose between 7% and
9.4%.
    "The proposed bill would remove the current sub-concession
structure, but not change to the competitive dynamics
ultimately," Jefferies wrote in a research note.
    "As the government crackdown on junkets continue, we expect
long-term pressure on VIP business," Jefferies said, adding that
the near-term gross gaming revenue outlook remains bleak amid
uncertainties over timing of border reopening with recent
COVID-19 outbreaks in Mainland and Hong Kong.       
    
    

 (Reporting by Donny Kwok; Editing by Kim Coghill and Sherry
Jacob-Phillips)
 ((donny.kwok@thomsonreuters.com; +852 3462 7745;))