China: Macau Casino Stocks Soar as COVID Restrictions Set to Ease
The Facts
On Monday, shares of casino companies operating in Macau soared after the tourism-dependent city said it would ease COVID restrictions for visitors from mainland China.
Macau's Chief Executive Ho Iat-seng said the city would start allowing group tours from the mainland, as well as establish easier e-visa rules beginning in November. Following the announcement, the city's six licensed casino company's saw an overall stock price surge of over 10%.
The Spin
Narrative A
Though the easing of COVID restrictions is undoubtedly a hopeful sign, an increase in tourism won't mean much to American casinos if they can't renew their licenses. If China pursues a protectionist agenda and blocks US companies, it could be a sign of market decline for many US investors in the region.
Narrative B
With JPMorgan and Citigroup now bullish on American casinos like Las Vegas Sands subsidiary Sands China, the only response to this news should be optimistic. While licensing agreements are, of course, unknown right now, the fact that China is re-opening its borders to Macau should be what investors are focused on.