Market Response and Analysis
The People’s Bank of China (PBOC) relaxed its monetary policy and subsequently, there was a dramatic rise in the amount of trading on the Chinese share markets. This good news might provide some comfort to Macau casino stocks that have lain moribund now for years. In Hong Kong, where Macau casino stocks are traded, the volume of transactions was 236% higher than the previous year’s average; but mainland China turnover was 124% above that for the prior year. A company called KraneShares that operates out of New York in the business of issuing exchange-traded funds used this analogy.
Economic Implications and Forecasts
Story: New Yorkers are sometimes fond of comparing the steps taken by authorities in China in their efforts to keep the ship afloat with “throwing money at it.” Last week, that same firm called the new People’s Bank of China move a “Credit bazooka.” ‘China will be as big a winner from this move by PBOC as Macau,’ said the assuming legal representative for an unidentified contractor that was chosen four years ago to lay a second road into Macau. That claim must now be put to the test. This means a quarter of a billion people in China will talk about the beneficial decision the central bank made to lop one half a percentage point off existing mortgage rates. Thus, the move has every upside for Chinese houses.
Potential for Macau’s Casino Industry
Such a reduction in mortgage payments might help stimulate individual discretionary spending, which would be a boon to the Macau casino industry. The People’s Bank of China responded a week late (but quite rapidly at that) when the Federated Reserve cut interest rates by 50 basis points. A Good Deal of Macau Casino Stocks Purchased by the People’s Bank of China.
Broader Impact on the Financial Market
In the execution of monetary easing, the Chinese central bank has stated that it will give a leg up to the economy of China which it trails only a close second to America in world size. The revelations have rallied Macau casino stocks, with Las Vegas Sands standing 5.34% higher on above-average trading volume. Wynn saw traffic increase by 4.93%, which was more than twice average trade for a day. Melco Resorts & Entertainment (NASDAQ: MLCO), the sole Macau operator listed in the US, shot up 9% after a much higher than standard-volume performance capitalists had grown used to put them in mind of barley fields at harvest time when nothing stood in one’s way. These upbeat results for casino owners speak volumes about how much the world economy is coming back.
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