Macau’s casino operators saw revenue gains following the Chinese government’s announcement to revive the economy with a major stimulus package.
According to Macau news media, the announcement caused shares of the six largest casino concessionaires to rise from 2.32% to 12.77% at the end of trading.
Recovery of casino revenue is important for Macau
The stock appreciation is mainly the result of three crucial measures that the Chinese government recently announced:
- Increased funding
- Interest rate cuts
- A reduction in the banking system’s reserve ratio
Additionally, authorities made benchmark interest rate cuts, reduced existing mortgage rates, and provided liquidity to brokers and insurance companies. The aim of the measures was to increase confidence in the economy after the slowdown in recent months.
So, after the announcement, Chinese stocks and bonds, especially those with Asian markets, reached their highest high in two and a half years. The Chinese yuan also hit a 16-month high against the US dollar.
Brokerage Seaport Research Partners noted that the new monetary policies are “likely to boost sentiment toward China and Macau.”
Analyst Vitaly Umansky said that while the immediate effects on Macau’s revenue may be limited, sustained stimulus could lead to improvements in the Chinese economy in the medium term.
Umansky also added that “a stronger recovery in gross gaming revenue (GGR) would be crucial” for the Macau market in 2025. As this would drive improved economic conditions and consumer engagement.
Recent updates indicate that the Monetary Authority is expected to announce plans for Macau’s digital currency. Including going into the second phase, with testing in Hong Kong for its e-HKD Pilot Program.
