Macau casino stocks rise after Omicron fears abate

Macau casino stock prices rose after worries about the new Covid-19 strain began to subside.

Macau.- News of the new Covid-19 strain, Omicron, spooked investors in Macau casino stocks due to fears over possible new lockdowns. However, the fears seem to have subsided and Macau gaming stocks have regained some of their lost ground.

The stock prices of Las Vegas Sands, Wynn Resorts, Melco Crown Entertainment and MGM Resorts have rebounded by mid-to-high single digits. While the Omicron variant has already been detected in 38 countries, no deaths have yet been reported.

Macau casino stocks were also affected by the arrest of Alvin Chau Cheok Wa, CEO of Suncity Group Holdings. MGM China shares fell 11 per cent, and Wynn Macau and Sands China shares fell 9 per cent and 6 per cent respectively due to concerns about the short- and long-term consequences of the arrest. 

Analysts at JP Morgan Securities said that although the role of VIP gaming in Macau’s casino industry has declined, stock prices had been harmed because “some investors may interpret this as a signal of a potentially broader clampdown on gambling itself, a view that we don’t agree with but cannot disprove.”

According to GGRAsia, Suncity Group accounted for 40 per cent to 45 per cent of the junket market in Macau based on 2019 figures.