Shares of Macau casino operators have surged amid China's economic stimulus measures

Shares of six casino operators in Macau saw an increase of 2.4% to 6.65% on the Hong Kong Stock Exchange as of September 24. This uptick occurred in the wake of economic stimulus measures announced by the Chinese government the day before.
The People's Bank of China unveiled several initiatives, including a reduction in the benchmark interest rate, cuts to existing mortgage rates, and the provision of liquidity to brokers and insurance companies. Following these announcements, the value of all Chinese stocks rose, and the yuan reached its highest level against the dollar in 16 months.
Brokerage firm Seaport Research Partners noted in a memo that the announced monetary policy stimulus is likely to improve sentiment surrounding China and Macau. Analyst Vitaly Umansky pointed out that while these recent measures may not have an immediate impact on Macau's revenues, Seaport anticipates that if they are sustained, the country's economy will begin to show progress in the medium term.
According to Umansky, a key driver of financial growth for Macau's casinos will be an increase in gross gaming revenue, linked to improved economic conditions. Additionally, rising consumer sentiment and spending will contribute positively to this trend.
Umansky believes that premium clients will remain the primary catalyst for financial improvements in Macau's casino industry. However, other players could also play a significant role in boosting revenue by 2025.
He shared a forecast for gross gaming revenue in October 2024, predicting it will reach 21.5 billion patacas (approximately $2.65 billion). This figure would represent a 28% increase compared to September and a year-on-year growth of 10.3%.
Notably, Macau has seen an increase in both the amount wagered and the number of VIP casino players over the past year.