Macau casino shares continue to fall as neighbouring lockdowns intensify

March 17, 2022 China Earnings & Filings Industry Updates

The Bloomberg index that tracks the evolution of the shares of Macau gaming operators fell by 10 per cent due to the extension of measures to contain the Covid-19 pandemic in mainland China.

According to the Bloomberg financial information agency’s index, the shares of the various operators that manage Macau’s casinos were losing 9.9 per cent, dragged by the 15 per cent drop in Wynn Macau and the 13 per cent drop in Sands China, with the Galaxy Entertainment and SJM Holdings are down about 12 per cent.

The fall in the shares of Macau casino management companies follows the confinement measures imposed in two neighbouring provinces (Shenzhen and Dongguan) for a week, which makes it impossible for players to travel from these regions, and due to the significant increase in cases of Covid-19 in mainland China, which from Sunday to Monday saw the number of infected more than double, from around 1,500 on Sunday to more than 3,600 on Monday.

Gaming revenues in the week between March 7 and 13 fell 37 per cent from the previous week, recording the lowest daily average since the Covid-19 outbreak in Zhuhai province in January, according to financial information agency Bloomberg.

On Monday, the Hong Kong stock market had fallen nearly 5 per cent, with the tech stock index down about 11 per cent, a day after the announcement of the lockdown of Shenzhen’s 17 million people, adjacent to Hong Kong, due to the increase in cases of covid-19.

These measures led to the suspension of operations at many factories in Shenzhen, including those of Taiwanese giant Foxconn, the main supplier of the Apple mobile phone brand.

Authorities have ordered residents of the city, which is also home to tech giants Huawei and Tencent, to stay at home.

According to analysts, markets are also concerned about possible sanctions against China if Beijing responds to Moscow’s alleged request for military and economic aid following the invasion of Ukraine.