Alan R. Woinski, Editor
China Pneumonia Situation Worsens – Macau Gaming Stocks Hit in Hong Kong
Ahead of the Chinese New Year period and the optimism expressed by analysts and now some gaming company executives, travel stocks, including Macau gaming stocks, took a hit today on the Hong Kong Exchange. The reality is that there are more reports coming out about the Sars-like pneumonia outbreak in Wuhan, a big increase in the number of cases and very select cases being reported in other locations and countries from people who visited Wuhan.
In terms of Macau gaming stocks, Daiwa Capital showed they were a little less bullish after the runup, lowering Galaxy Entertainment and MGM China to Outperform from Buy and SJM Holdings to Hold from Outperform. Melco Resorts is their top pick.
This past week was the beginning of the pre-CNY slowdown in Macau, not anything out of the ordinary but scrutinized a bit more because of the mysterious pneumonia type outbreak. Very few gaming analysts have even mentioned this issue, most remaining very bullish on the group despite continued expectations for January to be at best break even in GGR.
We still remain concerned because we remember the Sars period where even though it turned out to be as much of a farce as Union Pay impacts on Macau GGR, it scared the daylights out of investors and the hysteria did cause a brief decline in visitation. The Bloomberg story on how the Wuhan situation hit travel stocks traded in Hong Kong can be found
InstaGamingGram is an institutional-oriented intra day news blast that gives up to the minute information and analysis on events that are impacting the casino gaming world and gaming stocks.
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