HK Stock Market Move | Gambling stocks continue to decline. Da Hang expects the World Cup to divert some passengers, intensifying competition and potentially leading businesses to increase capital spending.

The gambling stocks continued to decline. As of the time of writing, MELCO INT'L DEV (00200) dropped by 4.79% to 3.38 Hong Kong dollars; GALAXY ENT (00027) fell by 4.34% to 29.56 Hong Kong dollars; SANDS CHINA (01928) dropped by 4.26% to 13.72 Hong Kong dollars; MGM CHINA (02282) fell by 3.66% to 9.99 Hong Kong dollars. Citigroup previously released a research report stating that Macau's gambling revenue may face obstacles due to the summer World Cup diluting the betting budget of some Macau players. In addition, due to the fact that Jacky Cheung held a concert in Macau at this time last year, the comparison base this year will be higher. The bank maintains its June gambling revenue forecast for this year at 19 billion Macau dollars, implying a 10% year-on-year decrease. Lyon also stated that the second quarter of the Macau gaming industry is in a seasonal low season, and the World Cup event lasting 39 days is expected to divert some tourists, possibly leading to a quarterly decline in industry EBITDA in the second quarter. The bank has lowered its forecast for the growth rate of Macau's total gambling revenue in 2026 by 1 percentage point. In addition, Sands China and Wynn Macau both raised their capital spending guidance in the first quarter, which may force MGM CHINA and SJM HOLDINGS to increase capital investment to maintain competitiveness. The bank predicts a significant increase in industry total capital spending, putting pressure on free cash flow.