Macau Gaming Stocks Plummet to All-Time Low in December 2023

Industry analysts are puzzled by the decline in gaming shares in Macau, which reached their lowest levels in December 2023. Despite the reopening of borders in January, neither the income nor the money that returned to pre-COVID-19 levels have helped the situation.

In an unexpected turn, the share prices of 5 out of 6 Macau concessionaires have experienced a downward trajectory of over 20% compared to January 1 of this year. Only MGM China has seen progress, surpassing 2019 levels due to the addition of 198 new gaming tables. This progress has led to a 1% increase in their share value compared to their trading costs of January 1.

Analysis at 2NT8 Ltd, an industry consultancy firm, has revealed that the Hong Kong-listed shares of 6 concessionaires have been steadily declining since August, bottoming out in December. Alidad Tash, the managing director of 2NT8 Ltd, commented that this decline contrasts with the actual performance of the casinos, as revenues and profits have been steadily rising.

Starting from December 4, Galaxy Entertainment Group experienced a 21% drop in gaming shares compared to January 1, followed by Sands China (22% drop), Wynn Macau (32% drop), Melco International Development (38% decline), and SJM Holdings (48% decline). According to Tash, the fear of a slowdown in China, especially in non-essential spending such as luxury items, gaming, and leisure, is likely the reason for this decline.

Analysts at JP Morgan have also expressed surprise at Macau’s stock results, noting 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.

In other news, the Macau government collected MOP51.55 billion (US$6.42 billion) in gaming tax revenues from January to October 2023. This data was released on November 16, highlighting the financial impact of Macau’s gaming industry on the government’s operations.