After the local government said it will follow mainland policy to relax Covid-induced curbs, the jump in casino shares led to a rise in stocks tied to China's reopening.
A Bloomberg gauge tracked six casino operators, which rose as much as 8.6% to the highest since Sept. 2021, the highest since Sept. 2021. MGM China Holdings Ltd. and Wynn Macau Ltd. led the gains.
The plan to reopening is proof that the world's second biggest economy is moving fast to dismantle its draconian Covid curbs, a positive catalyst that is expected to help risk assets weathering recessionary headwinds, as evidenced by the city s plan to move toward reopening.
Analysts are increasingly bullish about Macau casino operators. JPMorgan analyst DS Kim said that 2023 could be a good year for Macau as casino operators benefit from license renewals, reopening and cheap valuations.
Morgan Stanley analysts including Praveen K Choudhary wrote a note Monday, saying that the sector is expected to see a full recovery in 2024, as earnings growth normalizes.
None of JPMorgan is trying to fix health care.