Published on: September 26, 2024, 02:21h.
Last updated on: September 26, 2024, 02:21h.
Macau casino stocks, such as Las Vegas Sands (NYSE: LVS) and Wynn Resorts (NASDAQ: WYNN), experienced a second surge this week. This uptrend was driven by speculation that China may implement stimulus measures to support its struggling economy.
Las Vegas Sands and Wynn saw gains of 7.79% and 8.24%, respectively, in late trading. This followed reports from Chinese state media indicating the Ministry of Finance and Ministry of Civil Affairs are considering distributing one-time cash payments to specific groups of Chinese citizens. The disbursements are expected to occur before October 1.
Earlier in the week, Macau casino stocks rose after the People’s Bank of China (PBOC) reduced reserve requirements, reverse repo rates, and mortgage rates. Analysts believe there may be further monetary easing measures on the horizon.
These rate cuts and stimulus announcements have provided a much-needed boost to Macau casino stocks. Wynn’s stock soared with trading volume doubling, while Melco Resorts & Entertainment (NASDAQ: MLCO) also saw a 15.39% increase in late trading, surpassing average daily turnover.
Positive Outlook on Chinese Stocks
In recent years, Chinese equities, including Macau casino stocks, have struggled. However, with central banks around the world implementing monetary easing and China unveiling stimulus measures, some investors are becoming more optimistic about opportunities in the Chinese market.
David Tepper, owner of Appaloosa Management and an investor in gaming stocks, noted, “They exceeded expectations, and [People’s Bank of China governor Pan Gongsheng] promised to do more and more and more, and that’s very strange language, especially for any central banker, but especially over there.”
Tepper’s comments come as J.P. Morgan advises clients to anticipate positive economic developments in China due to monetary easing and fiscal stimulus.
Strong Performance for Sands Stock
Las Vegas Sands has seen significant gains following the rate cuts and stimulus news. The parent company of Sands China has experienced a nearly 15% increase in the past week and over 21% in the past month.
This bullish momentum has erased most of the stock’s year-to-date losses and is on track for the highest closing prices since May.
In a recent report, Barclays identified Sands as one of 10 stocks that could benefit if Vice President Kamala Harris wins the presidency in November. Sands was the sole gaming stock mentioned in the group, highlighting its potential in a Harris administration.