Macau casino stocks jump on UnionPay clarification

Macau casino stocks jumped after the government clarified its policy on jewellery and watch retailers’ use of China UnionPay terminals within casinos.

The government has banned retailers from adding any new card devices from next month and has asked banks to strengthen the monitoring of large cash and card transactions, but it hasn’t asked the jewellers to move out of casinos or cease operations, Finance Secretary Francis Tam said.

The government may also step up scrutiny of card deals within casinos at an appropriate time, Tam said in a statement.

Speculation has been rife that Macau planned a major crackdown of the illicit use of China UnionPay terminals, amid concern they are being used to circumvent China’s currency controls. There were fears that removal of the terminals may restrict liquidity in the market at a time when gross gambling revenue has already slowed due to a drop in VIP activity.

Sands China gained 4 percent in Hong Kong trading, MGM China was up 3.8 percent, Wynn Macau added 5.8 percent, SJM Holdings was up 3 percent and Melco Crown rose 2.5 percent.

“We believe sentiment for Macau names is shifting back to positive,” Sterne Agee analyst David Bain wrote in a note. “We note two high-profile downgrades of the sector within the last 10 days and all Macau stocks are higher within the same time frame.”

 

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