Published: June 21, 2022

Macau is rocked by local COVID cases which threaten casino traffic

Macau casino stocks fell in Hong Kong after the gambling region saw its first COVID-19 outbreak in eight months.

The city reported 21 preliminary-positive cases in the local community as of Sunday evening. Schools and non-essentialĀ businesses were shut down until at least Tuesday to allow time for mass testing of all residents. Arrivals to Macau via Zhuhai-Macao ports must present a proof of negative result of nucleic acid test within 48 hours.

Jefferies called the development yet another bump in the road for the Macau casino sector recovery.

"Macau gaming revenue should hit new YTD lows given mass testing from noon on 6/19 after the new local infection outbreak. Intuitively, visitations would be impacted and gaming revenue should hit new YTD lows, which we believe removes any prospects for Macau relaxing quarantine policies further ahead of summer," noted analyst David Katz.

JPMorgan said the early-morning alert was the largest local outbreak in over two years and warned Macau's casino gross gaming revenue could go to near-zero levels for the short term. There is also the risk that the outbreak could grow.

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