Macau based analysts conflict over effect of visa restrictions

TAGs: analysts, China, guangdong, Macau, visas

macau fireworksSome of Macau’s largest casino business firms have seen stocks plummet due to problems with certain Chinese credit cards and visa restrictions. Macau Daily reported that neighboring Guangdong is considering the tightening of visa issuance to the enclave. At the same time UnionPay confirmed that customers would be limited to the amount they can spend outside of the Mainland. Cameron McKnight, analyst at Wells Fargo, admitted: “Recent weakness in Macau gaming revenue and visitation growth could be partially explained by the visa restrictions and reduction in China UnionPay limits highlighted by the Macau Daily. While expectations have recently moderated, we believe outperformance in the Macau stocks is likely to be limited here.”

The worst affected company was Galaxy Entertainment Group, where the price dropped 5.7 percent to HK$18.12 and Sands China which was down 5.6 percent. Wynn Macau (4.5 percent), MGM China (4.6 percent), SJM Holdings (3.7 percent) and Melco Crown Entertainment (2.7 percent) were also among those to experience a drop off as well. There are some that aren’t convinced the visa strictness has anything to do with the decreases in stocks and that it will actually end up happening at all.

Grant Govertsen, analyst at Union Gaming Group, stated: “The report on visa tightening is a bit speculative. We haven’t seen anything so far to convince us this is happening.”

Some of the agreements that have been inked by Macau over the past few months also dispel this being a huge factor and the latest of these was just last week with Russia. Similar exemptions are in place with 101 other countries and it gives them at least some cushion if Guangdong ever starts to tighten visa restrictions. China is always going to be their biggest market and there’s no doubt it’ll have an effect. It’s just unlikely to be a huge one.


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