Gaming revenues rise amid travel hopes

Gaming revenues in Macau rose for the fifth straight month, surging 8.12 times year-on-year to 6.54 billion patacas (HK$6.35 billion) in June, beating estimates, official data showed.

However, on a monthly basis, gaming revenue fell 37.4 percent affected by re-emerging Covid cases in Guangdong province. June's numbers are only 27 percent of the level seen before the pandemic struck.

Gross gaming revenues for the first half grew 45.4 percent to 49.02 billion patacas from a year ago.

As the news that cross-border travel between Hong Kong and Macau would resume on July 11 went viral, gaming stocks bounced back and performed well on Wednesday.

Galaxy Entertainment (0027) rose 4.4 percent to HK$62.15, Sands China (1928) rose 2 percent to HK$32.7. SJM (0880) rose 4.4 percent to HK$8.48, and Wynn Macau (1128) rose 1.8 percent to HK$12.22. However, MGM China (2282) fell 0.3 percent, against its peers.

Dickie Wong Tak-kei, executive director of research at Kingston Securities, predicted that Galaxy Entertainment may have the brightest outlook, and he believed the stock could rise to the 50-day moving average or even reach its late-May level.

But the analyst also reminded investors not to be too optimistic about the rise in gaming stocks. He said the excitement of the border reopening has been reflected in the market over the past few days, and the upward trend will not last long.

Although Honkongers might be exempt from the 14-day quarantine, it was expected that they would be required to complete two doses of vaccinations and obtain a nucleic acid test certificate before entering Macau, local media reported.

Hong Kong tourists might also be required to perform activities within a specific hotel area, and the use of hotel swimming pools and other related facilities will be prohibited.

Wong also believed that the news would have a limited impact on the general market and the Hang Seng Index may rise to 29,000 points in July, but not reach 30,000.

He said that the market this month would be mostly affected by global stock market trends and new economy stocks. Amid the 100th anniversary celebrations of the Communist Party, Wong pointed out that heavy-weighted stocks like Alibaba, Tencent and Xiaomi might have some upward potential but they were still under strong regulatory pressure.