Casino stocks rise as China plans to ease border entry rules

Yahoo Finance Live anchors discuss how casino stocks are trading amid China’s plans to ease border entry rules.

Video Transcript


JULIE HYMAN: Just a few moments till the opening bell here. And we're watching casino stocks that are mostly in the green, as China drafts rules to make it easier for some foreigners to enter China for visits along the border to tourism sites. Now, Caesars is the outlier here, I'm pretty sure because Caesars doesn't have a business in Macau, right? Caesars is just US. So that's why it is not benefiting from this lift that the others that do have strong Macau businesses are seeing here.

And we're also hearing that Hong Kong is gonna end some of its COVID restrictions, like mandatory hotel quarantine. So that also could be helping matters. By the way, Wynn got a big boost yesterday after Credit Suisse reinstated its coverage of the stock with an outperform rating. So this is day two of this little casino rally we're seeing.

BRAD SMITH: Yeah, it absolutely goes to show the importance for these companies of making sure that tourism, especially in some of the areas where-- and for the players that are more internationally-focused, where there is a reliable name that a tourist would see in a place such as China and in Macau, particularly, where they might go to say, you know what? I know that experience.

And that particularly is what investors would look at to see exactly where that kind of globalization effort that's been pushed forward by some of the casino operators over years now is set to pay off and benefit them, because of that name recognition, that brand equity. And so with that in mind, you're seeing potentially even more of the reopening.

And especially in China. This is such a key growth area for a lot of the casinos as well in ensuring that they can actually monetize on tourism as that is starting to be able to have a clearer pathway to come back into the region.

JULIE HYMAN: Yeah, I mean, in the case of a Wynn, for example, 40% of its sales come from Macau, specifically. And that analysts over at Credit Suisse said yesterday, that Macau sentiment was near a bottom. So if we start to see some reopening in China that could certainly help benefit that business.