Chinese tourists returned to Macau in huge numbers after Beijing relaxed travel restrictions to the city. As a result, Macau casino stocks and bonds increased their value. Shares of Sands China, Melco International Development, and MGM China outperformed the Hong Kong market’s increase of 3.25 percent.
Before the pandemic, gaming revenue accounted for most of Macau’s gross domestic product. Also, its gaming revenue increased 82.5 percent year-over-year to $1.4 billion in January. But, according to gambling reviews and news sites, it came after almost half a million Chinese visitors went for the Lunar New Year holiday.
Basketball betting picks experts expect the future to be bright for Macau. Visitors increased the table drop to amounts equal to pre-pandemic levels. In addition, the Macau government awarded new licenses to current casino operators. As a result, it removed the worries of investors.
Macau Casino Stocks and Bonds
Some battered bonds’ face value may drop below $1 USD. For example, in October, Wynn Macau’s US$1 billion high-yield bond was trading at 52 cents to the dollar; now, it is trading at 79 cents. The bond pays 5.125 percent and matures in 2029.
The drop in risk premium is reflected in the narrowing of spreads over equivalent US Treasuries, which now stand at 526 basis points (bps) from a record high of 1,127 bps in October.
According to Korea Sports League News sources, bonds issued by casinos are in demand from investors who want exposure to Chinese bad debt. Still, they would instead not hold bonds issued by property developers. However, after a crackdown by Beijing, the prospects of the developers who issued the bonds remain uncertain.
CreditSights gives Wynn Macau bonds a “outperform” rating compared to the other two US casino corporations operating in Macao because of their higher yields.