Casino stocks around the world were rocked yesterday by news that mainland China had imposed ATM withdrawal limits on China Union Pay cardholders seeking cash in the world’s gambling capital, Macau.
However, shares rebounded somewhat today as investors realized that the restrictions were not as harsh as they first seemed, according to a Bloomberg report.
While the per-withdrawal limit has been cut in half, the daily maximum of 10,000 yuan ($1,450) has not changed, the report said. However, with ATM fees for these transactions effectively doubled, cardholders might think twice before converting yuan to Hong Kong dollars.
This would be just fine with a Chinese government bent on limiting the movement of currency out of China and dampening growth in Macao’s gaming industry, which generates $30 billion annually.
However, Bloomberg quoted JP Morgan Chase analyst DS Kim as saying that the ATM limit will have “virtually no impact on gaming demand/fundamentals, and limited overhang on sentiment/stocks.”