Global casino and airline stocks rise after news of coronavirus vaccine development 

by Noah Taylor Last Updated
Global casino and airline stocks rise after news of coronavirus vaccine development 

A major development in the quest for a coronavirus vaccine caused a surge in the stock price of airline and casino stocks in the Asia-Pacific in the first sign the industries could soon reopen at full capacity.

CNBC reports that travel restrictions have hurt the airlines and entertainment sectors, both which depend on tourism revenue.

News about a potential vaccine boosted optimism that the global economy could recover and “return to normal” sooner than previously anticipated.

“Your hotel stocks, casinos, airlines, all of those really are…now back in play,” chief investment officer at Citi Private Bank David Bailin said.

Airlines across the region surged, with Australia’s Qantas gaining 8.33 per cent.

In Hong Kong, Cathay Pacific grew by 14.06 per cent, while China Eastern Airlines rose 7.93 per cent.

Casino operators jumped too, with Crown Resorts rising 4.6 per cent.

In Hong Kong, Wynn Macau soared 9.95 per cent, while Melco International Development gained 6.84 per cent.

On Monday, Pfizer and BioNTech announced that their coronavirus vaccine was more than 90 per cent effective in preventing COVID-19 among those without evidence of prior infection.

The reported efficacy rate was higher than expected, as scientists had hoped for a vaccine that is at least 75 per cent effective.

While the development of the vaccine was a positive for the global economy, the Economic Intelligence Unit’s Agathe Demarais warned that “caution remains required.”

“We’re far from being out of the woods yet. There will likely be bottlenecks around the actual manufacturing processes of the vaccine, and getting the jab rolled out across the world will be both tricky and expensive,” Demarais said.

“We continue to expect that the global economic recovery will be slow and bumpy. Global GDP will not recover to pre-coronavirus levels until at least end-2022, with a longer timeline likely for several countries, including Japan, Italy and Mexico,” Demarais said.

Nagasaki pauses its integrated resort plans

A Japanese prefecture has halted its request for proposal process to host a casino resort.

GGR Asia reported in September that Nagasaki’s proposal has been postponed indefinitely.

The prefectural government noted it would decide later, an “appropriate time” for launching the RFP process, but said preparation work for launching the RFP process, but said preparation work would still go on for an integrated resort.

A Monday announcement mentioned the global impact of the COVID-19 pandemic and associated travel restrictions as reasons for halting the process.

There was no mention of the resignation on Friday as prime minister of Shinzo Abe, whose government had steered the casino liberalisation policy.

Nagasaki is the latest in a number of local authority suitors for a casino complex, or integrated resort as they are known in Japan, to announce a pause on their casino ambitions.

Yokohama and Osaka did so even before Mr Abe stepped down.

Nagasaki had previously indicated the RFP process could be launched before the Japanese summer ended, but it now says casino resort operators, the sort of entities that could eventually become a private-sector partner for the prefecture – had suggested the postponement.

Such operators reportedly cited the impact of the COVID-19 pandemic, and travel restrictions that limit their opportunities for on-site visits in Japan.

Land at the Huis Ten Bosch theme park in Sasebo City has been earmarked by Nagasaki as the site of an integrated resort project.

Three companies had previously confirmed to GGR Asia their respective intention to participate in Nagasaki’s RFP process.

They were: Japan’s Current Corp; a Japan unit of Casinos Austria International Holding GmbH; and Hong Kong-listed Oshidori International Holdings. 

Osaka prefecture and city, confirmed last week a pause for its casino RFP.

Subsequently on Friday, the mayor of Osaka and the governor of Osaka prefecture respectively suggested that provided Japan’s Liberal Democratic Party stays at the centre of national government, then the resignation of Shinzo Abe last Friday as the country’s prime minister, should not derail Japan’s introduction of casinos.

Banking group Nomura said in a Friday memo, offering commentary on Mr Abe’s departure, that were Yoshihide Suga, the chief cabinet secretary under Mr Abe – and touted in some quarters as a successor – to take over the top job, the casino policy would in likelihood remain in place.

A number of Japanese news outlets have reported that Mr Suga was expected to put himself forward as Mr Abe’s replacement.

On August 19, the mayor of Yokohama, spoke of an indefinite delay in issuing the local implementation policy on the casino resort initiative, citing the fact the national government had not yet issued its own so-called basic policy on IRs.

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