Investment bank JP Morgan said it is not sure what sparked a sharp decline in the share prices of Hong Kong-listed Sands China and NASDAQ-listed Melco Resorts & Entertainment given the absence of any obvious negative event impacting the Macau gaming industry.
Analysts DS Kim, Selina Li and Lindsey Qian said they had fielded calls from “dozens of investors” on Thursday after Sands China shares dropped 4.5% and Melco by 7% but calls with contacts on the ground yielded no news that would explain the decline. It also noted that, while Macau’s December GGR had disappointed on seasonality and very low VIP hold, it had corrected during the New Year holiday period.
Speculating as to what might be behind the fall, JP Morgan pointed to possible renewed geopolitical concerns over the United States’ recent operation in Venezuela which could heighten China-US tensions. Due to “perceived risks” as the leading American operator, some investors may have sold Sands China along these lines, the investment bank pondered.
It also hinted at possible concerns that Sands China’s 4Q margin and EBITDA could miss when the company reports its latest financial results later this month. Although Sands may have faced higher than expected opex during the quarter due to the inaugural NBA China games in October, JP Morgan’s analysts said, “We’re not sure why the market would be pricing in this risk today, because the company went into its earnings blackout three weeks ago and such expectations should have been set in late-December.”
A recently reported crackdown on foreign exchange transactions by Beijing is also seen as unlikely given that this has long been a major policy direction of China and recent discussions have not mentioned Macau, casinos or gambling.
IAG notes that the most recent analyst forecasts for Macau point to strong growth in the first half of 2026.
Sands China shares closed at HK$18.74 on Thursday, down from a weekly high of HK$20.04, while Melco closed at US$6.88 from a high of US$7.75.
