China's 500.com Jumps on Government Approval for Lottery Salesby
Online lottery operator shares gain 6.2% in New York
China government eases approvals on provincial lotto payouts
500.com Ltd. rose to a two-month high in New York after China allowed provinces to approve lottery sales and payouts without waiting for central approval.
The online sports lottery operator advanced 6.2 percent to $20.20 on Thursday, the highest since Aug. 17. Trading volume of 1.4 million shares was more than double the daily average of the past three months. The stock extended its rally to 33 percent from a Sept. 29 low as Chinese Internet companies gained in New York.
China removed a requirement for central government approvals on lottery sales and payouts, 500.com said in a post on the company’s Weibo account Thursday. The country’s State Council announced the cancellation of 62 administrative approval items, including lottery approvals, on its website.
“The government is able and willing to prop up what they deem to be industries and companies that have decent fundamentals but are getting hit by a downturn in the equity markets,” Ankur Patel, chief investment officer at R-Squared Macro Management LLC, which invests in Chinese stocks, said by phone Thursday.
China has gone to unprecedented lengths to support economic growth, increasing stimulus to the real estate sector as well as the auto and casino industries. The country’s leaders are poised to lower their growth target for the next five years at a meeting Oct. 26-29 in Beijing amid challenges from rising debt to excess industrial capacity and bloated state enterprises.
Shenzen, China-based 500.com helped lead gains on the Bloomberg China-U.S. Equity Index, which added 3.1 percent. The Deutsche X-trackers Harvest CSI 300 China A-Shares ETF advanced 4.7 percent to $35.77, the highest since Aug. 20.
“We believe WBAI is uniquely well-positioned to benefit from the growth and streamlining of the lottery system in China,” David Riedel, president of Riedel Research Group, said by e-mail Thursday.