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China resumes tourist visas to Macau, lifting casino stocks

08/11/2020| 10:04:09 PM|

The latest moves are a “huge step in the right direction”.

China will resume issuing tourist visas for visitors to Macau, paving the way for the mass return of Chinese punters to the world’s largest gaming hub after months of losses.

Visas for both individual and group tours to Macau from the mainland will be restored in phases. Residents from the neighboring city of Zhuhai, in Guangdong province, will be able to get visas from Wednesday. The wider province will then follow on Aug. 26, before the rest of China on Sept. 23, said a statement Tuesday from the National Immigration Administration.

The statement provided more details on timing after it was announced in a briefing Monday that visas would be restored for Zhuhai. A Bloomberg gauge of Macau stocks jumped 7.1% on the earlier news.

The move reverses a ban implemented in late January to contain the spread of the coronavirus. It effectively allows for the revival of the gambling enclave whose revenue had been five times that of the Las Vegas Strip before the pandemic, driven largely by Chinese demand. Without Chinese visitation, Macau’s gaming revenue plunged by over 90% for four consecutive months and operators have been losing $15 million daily in expenses, according to a Morgan Stanley estimate.

In addition to the visa resumption, a two-week quarantine imposed on Macau travelers upon their return to the mainland will be lifted throughout the country from Aug. 12, China’s Hong Kong and Macao Affairs Office said in a statement Monday. The quarantine rule was previously lifted for Guangdong province last month.

Macau’s gross domestic product, heavily reliant on the tourism and gaming industry, shrank 49% in the first quarter of this year. Even though casino operators reopened after an unprecedented 15-day shutdown in February, travel curbs meant tourists and high rollers couldn’t get there.

The latest moves are a “huge step in the right direction,” George Choi, a Hong Kong-based analyst at Citigroup Inc., wrote in a note earlier Tuesday.

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