Industry analysts stay puzzled by the descending trajectory of gaming shares in Macau, which this month, or December, officially fell to their worst levels so far in 2023. In addition, neither the income nor the money that has returned to the levels before COVID-19 pandemic that have occurred since Macau decided to make itself available for foreign visits on January 8, have not helped the situation.
Unexpected twist:
In an unexpected twist to Macau’s recuperation, the share costs of 5 out of 6 Macau concessionaires are on the downward trajectory of over 20% compared to January 1 this year, aka an entire week prior to the reopening of borders. Just MGM China, which is surpassing 2019 levels so far due to the addition of 198 newest gaming tables according to the terms of its gaming concession, which lasts 10 years and is officially signed in December 2022, has experienced any progress since December 4 of this year. The progress is that its share value is up 1% compared to their trading costs of January 1.
Furthermore, analysis at 2NT8 Ltd, an industry consultancy firm, point out that Hong Kong-listed shares of 6 concessionaires have experienced a steady decline since five months ago, aka in August. However, they bottomed out this December. In this regard, Alidad Tash, managing director of 2NT8 Ltd, commented: “This has been in contrast to the actual performance of the casinos, since revenues and profits have been steadily rising.”
From December 4, Galaxy Entertainment Group also experienced a 21% drop in gaming shares compared to January 1, followed by Sands China with a 22% drop, Wynn Macau 32%, Melco International Development a decline of 38% and finally SJM Holdings a decline of 48%. While no one knows for sure why this happened, Tash commented according to the Inside Asian Gaming: “The culprit is most likely the fear of a slowdown in China, especially as it relates to non-essential spending such as luxury items, gaming and leisure.”
On a related note, analysts at JP Morgan not too long ago showed almost identical surprise to Macau’s stock results, noting in a research note that the mixed market capitalization of the 6 concessionaires has dropped to the same levels as in 2022 and is still only half of the levels prior to COVID-19.
$6.4 Billion In Gaming Tax Revenue in Ten Months of 2023:
In other news, recently it was recently reported that on November 16 released data on the financial impact of Macau’s gaming industry on the governmental operations. According to the Bureau, the Macau government collected MOP51.55 billion (US$6.42 billion) in gaming tax revenues from January to October 2023.