Investors’ fear over the trade war between China and the US have caused Macau’s major casinos’ stock prices to drop by 40% since June.
Macau.- The top six casinos in Macau have seen their stock prices drop by an average of 40% since June as investors fear the impact of the China-US trade war on the local economy. However, it isn’t clear whether cheaper stocks are a sign that the prices will soon take off again as high rollers may not gamble in Macau as the value of the yuan exchange rate weakens.
“China’s economy is still uncertain, so the rich Chinese and the VIPs will stay relatively conservative,” executive director of investment strategy at Haitong International Securities Kevin Leung said, and added: “I am still waiting to see a big and sustainable improvement in gaming revenue.”
According to the Gaming Inspection and Coordination Bureau, GGR dropped by 17.3% month-on-month in the territory to €2.34 billion in September. However, the results were harmed by the impact of Typhoon Manghkut and are expected to bounce back to almost €3 billion in October.
Recently, the International Monetary Fund revealed that Macau’s GDP growth is likely to slow down this year and the next is projected to be 6.3%, down from the 9.1% recorded in 2017. However, several brokerages have announced that GGR in the area will continue to grow.