ETF Trends
ETF Trends

Asian casino stocks, along with the gaming-sector-related exchange traded fund, are rebounding as traders go bottom-fishing after the graft-induced sell-off in Hong Kong.

The Market Vectors Gaming ETF (NYSEArca: BJK) was up 1.1% Monday and 1.5% higher over the past month after declining 21.3% over the past year. [Two-Deck Shoe: Dueling Views on the Gambling ETF]

While the Hang Seng was little changed Monday, Wynn Macau rose 4.8%, its strongest gain in almost a month, while Sands China added 3.3 and Galaxy Entertainment was up 3.1%, Bloomberg reports.

BJK includes Wynn Macau 2.0%, Sands China 7.0% and Galaxy Entertainment 8.7%.

“Investors are really just focused on trying to find stabilization or a bottoming,” Vitaly Umansky, an analyst at Sanford Bernstein, said in the Bloomberg artlce. “As long as things aren’t deteriorating, things seemed to be fairly consistent, that’s probably a decent sign from an investor’s perspective.”

The Macau’s casino industry has suffered a huge blow to VIP gaming after President Xi Jingping enacted a campaign on widespread corruption, which included thousands of officials and executives at state-owned enterprises. [Macau Illegal Transaction Crackdown Puts Gaming ETF in the Red]

Consequently, gross gaming revenue in Macau has plunged 39% to 19.2 billion patacas, or $2.4 billion, last month. Macau also experienced a 17.6% decline in Chinese visitors in March.

The visitor slump “may reflect slower economic growth in mainland China, and comes as complaints rise in Macau about Chinese tourists over-running the city,” Bloomberg Intelligence analyst Tim Craighead said in the article.

Wynn Resorts (NYSE: WYNN) has already cut dividends in response to the weakness, pointing to uncertainty in the Chinese city as the “plaguing word of the day.” WYNN makes up 6.3% of BJK’s portfolio.

However, the city is trying to rebuild its market with shops, restaurants, entertainment shows and other non-gaming attractions to bring in more middle-class tourism. For instance, Galaxy Macau is planning a Broadway.

Market Vectors Gaming ETF

For more information on the gaming industry, visit our leisure & entertainment category.

Max Chen contributed to this article.

 

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.