Top Macau Junket Operator Crashes 48% On CEO Arrest As Trading Resumes
Shares of Macau’s largest junket operator were halved Tuesday after being suspended on Monday following the arrest of the company’s gambling boss over links to cross-border gambling and money laundering.
Alvin Chau, chairman and a controlling shareholder of Suncity Group Holdings Ltd., was among 11 people arrested in Macau on Saturday. He’s accused of money laundering and cross-border gambling in mainland China, the Philippines, and elsewhere.
On Tuesday, Suncity shares reopened for trading in Hong Kong and plunged 48%, the most significant daily plunge since 2008.
Suncity is the largest junket operator in Macau. They’re responsible for attracting wealthy gamblers into the world’s largest gambling hub by lending them money. In essence, junkets are responsible for a large portion of Macau’s high-roller traffic.
“We are heading for a junket-free scenario for Macau casinos,” said Angela Hanlee, an analyst with Bloomberg Intelligence.
Macau authorities (cough, cough, Beijing) have made a clear policy decision to rein in junkets in Macau, especially targeting money laundering out of the country, which now means only cryptos are left to bypass China’s firewall.
Chinese President Xi Jinping’s crackdown on corruption has crushed Macau casino shares this year. Some institutional investors have found Macau casino stocks appealing. For more on that and what Citigroup thinks about buying the dip (read: here).
Tue, 11/30/2021 – 13:40