Gaming stocks with large exposure to Macau soared on Tuesday on reopening optimism tied to the world’s largest gaming center. Chinese stocks surged broadly as a Chinese study showed the winter surge of Covid-19 could have peaked in major cities.
Melco Hotels (MLCO), which is based in Hong Kong, as well as Macau-linked casino stocks that trade over-the-counter in the United States saw some of the biggest gains on Tuesday.
These game stocks include Sands China (SCHYY), Wynn Macau (WYNMF), MGM China (MCHVF), Galaxy Entertainment Group (GXYEF) and SJM Holdings (SJMHY).
Relative of Wynn Macau Wynn Resorts (WYNN) surged after Wells Fargo upgraded overweight stocks from equal weight. Company analysts said reopening China will help the gaming stock. MGM China parent company MGM Resorts (MGM) and parent company of Sands China Las Vegas Sands (LVS) also increased slightly.
Wells Fargo’s rating comes about a week after UBS analyst Angus Chan wrote that Macau’s GGR (gross gaming revenue) could be increased “significantly” from the start of 2023 after three difficult years. .
Chan linked the move to the “effective removal” of coronavirus quarantine requirements in China.
He said while a nucleic acid testing requirement remains in place, visitors to the Asia-Pacific casino hub will no longer be required to self-quarantine for five days in addition to a three-term. days to self-isolate at home. Both mandates will be abolished on January 8.
Separately on Tuesday, the South China Morning Post reported that researchers from Ruijin Hospital and Shanghai Jiao Tong University predict the winter wave of Covid-19 may have passed in major Chinese cities. But the country will experience several more waves, including in rural areas, and a new surge at the end of the year, the researchers said.
Gambling stocks exposed to Macau, Chinese stocks
MLCO stock jumped 6.4% to 12.24 on Monday.
Several OTC peers also saw big gains. Sands China climbed 6.3%. MGM China jumped 10%. Galaxy jumped 4.8%.
WYNN stock rose 3.7% to 85.33 trading today, after hitting 86.50 intraday. The Wells Fargo rating raised the stock’s buy point to 101 from 74.
MGM stock edged up 1.1% to 33.91 on Monday, also trimming intraday gains. LVS shares gained 1.1%.
Amid new study suggesting Covid spike in major Chinese cities, Ali Baba (BABA) jumped 5.3% on Tuesday. Dada Nexus (DADA) climbed 26.1%. bilibili (BILI) jumped 14.1% and iQIYI (IQ) increased by 16.8%.
Casino stocks have had a volatile 2022 due to the uncertain regulatory state of the industry.
They plummeted last July after Macau – an administrative region of China and the world’s largest gambling hub – began a citywide lockdown to combat rising coronavirus cases.
Gaming stocks then soared after September as Macau reported an easing of Covid-19 travel restrictions, making it easier for people to return to the world’s biggest gaming hub.
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