Casino stocks cheer Macau gaming surgeBusiness | Victor Zhong and Bloomberg 2 Jun 2021
Macau's gaming revenues jumped 492.2 percent to 10.45 billion patacas (HK$10.14 billion) in May, beating analysts' expectations for the first time in four months, as mainland tourists flocked to the gambling hub over the Labour Day Golden Week holidays.
Though revenues rose 24 percent from the previous month, they were still 60 percent lower than the same period in 2019 when the industry was not hard hit by the pandemic.
In Hong Kong, casino stocks generally rose on the news, though Macau said it would implement stricter quarantine for arrivals from Guangdong.
Galaxy Entertainment (0027) traded 3.34 percent higher at HK$65, while Sands China (1928) rose by 2.17 percent to HK$35.30 on Tuesday.
Also, MGM China (2282) climbed by 0.65 percent to HK$12.42 after a drop of as much as 2.4 percent in the morning.
Daily visitor arrivals in Macau continued to show an upward trend in May as the city tries to attract mainland gamblers who have been discouraged by a tougher visa process amid the pandemic, Bloomberg reported.
Some 167,000 visitors came to Macau during the five-day Golden Week holidays, with more than 93 percent from China, according to the Macau Government Tourism Office.
Average daily visitor arrivals during the five-day holiday rose 158 percent compared with the Spring Festival in February, and climbed 25 percent from last month. Still, that figure only amounted to 21 percent of the figure from the same holiday week in May 2019, before Covid-19 hit.
Gaming revenue quickly dropped off after Golden Week to around 250 million patacas a day - 10 percent lower than in April - Credit Suisse analysts including Kenneth Fong wrote in a note on May 26, showing that a strong holiday period could not compensate for weak demand seen during the rest of the quarter.
However, new Covid-19 cases in China added uncertainty to the recovery path for Macau, which depends largely on mainland visitors.
The Macau government has strengthened its cross-border restrictions for mainlanders in Guangdong.
Arrivals from some districts in Shenzhen and Guangzhou are already required to quarantine in Macau due to the recent outbreak - measures that serve as a reminder of the risks of recovery, according to Credit Suisse.
Macau has ramped up efforts to promote tourism to mainland residents given that both sides have largely managed to contain the virus. However, the city's government still has tight restrictions for travelers from most spots, including Hong Kong and Taiwan.