Forex controls hit Macau casino stocks

Renminbi
Renminbi

Macau’s casino operators tumbled 3 percent on Tuesday after the Chinese currency regulator announced extra requirements for citizens to buy foreign exchange, Bloomberg reports.

Over the weekend, China’s foreign exchange regulator said it would step up scrutiny on individual foreign currency purchases and strengthen punishment for illegal money outflows.

“There have been leaks in China’s system of personal foreign exchange purchases,” said the regulator.

In addition, starting from July 2017, banks and other financial institutions in China will be required to report all domestic and overseas cash transactions of more than 50,000 yuan (US$7,201), compared with 200,000 yuan previously.

The government said the move aims to target money laundering, terrorism financing and fake outbound investment transactions, and is not intended to affect legitimate business activities.

According to a report from Bloomberg, both Galaxy Entertainment Group and Sands China Ltd. stocks tumbled more than 3 percent on the stock exchange on Tuesday.

It was only last month when casino stocks took another hit after the announcement of new capital controls.

In December, stocks tumbled after the South China Morning Post reported that China would cut UnionPay ATM withdrawal limits in Macau.

However, it regained strength after it turned out the restrictions were not as tough as initially believed.