By Ben Otto
SJM Holdings Ltd. shares are higher in early trade following news that Macau is weighing changes to gaming laws that could help casinos hard hit by a dearth of visitors during the pandemic.
SJM rose as much as 9.7% before paring its gains to 5.8% at 3.26 Hong Kong dollars (42 U.S. cents). The stock is down about 38% this year and 62% over the past 12 months.
One of the proposed changes floated by Macau officials Friday would allow so-called satellite casinos linked to the gaming hub's cash-strapped concessionaires to be run by management companies rather than face a need to be acquired by the concessionaries, a requirement that officials had previously considered.
Citi analysts said the proposal would particularly benefit SJM, which has ties to the majority of the city's satellite casinos.
"The proposed changes directed towards satellite casinos should alleviate investors' concerns on SJM's potential shouldering of the significant staff costs at the satellite casinos," Citi analysts said in a research note. "More important, the changes should clear up the last hurdle for its refinancing."
Another change in the law could reduce taxes on casinos, which Citi described as "good news for all concessionaires."
Melco International Development Ltd. adds 3.2% in mid-morning trade, while Wynn Macau Ltd. gains 0.5% and Galaxy Entertainment Group Ltd. gains 0.8%. Sands China Ltd. slides 0.5%.
Write to Ben Otto at firstname.lastname@example.org
(END) Dow Jones Newswires