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00:00So on the balance of things let's start off with the new proposed gaming law. The details really seem to alarm some investors and we saw that claw back of the gains that we saw earlier. Good morning. So yes the gaming law has been has now been published or the draft amendment has been published. It clarifies I think much of the uncertainty that existed both through the public consultation process that we saw in Macao in the fall of last year. So that's been the positive. That's why we've had a rebound. I think right now we're in a pause mode because investors are digesting what these terms actually mean. And the reality of the situation is that while the law will get fixed I think we'll get more and more clarity around the future from a regulatory perspective. What really needs to happen is is the travel barriers need to come down and visitation needs to resume to Macao in a much greater way. Tell me about the I guess seniority in terms of which of the names you like and which you think perhaps a little bit more resilient to the risks that we're talking about. Well in Hong Kong we prefer stands China and MGM China largely because of the mass and premium mass recovery story that we have baked into our projections over the next two to three years. We think the risk reward for for most Macao stocks today is actually still very very attractive. If investors are able to hold for an extended period of time you know beyond six months beyond 12 months because of the uncertainty around when recovery will really begin. This needs to be a long term investment rather than than something much more short term focused. Especially given that we don't know how the only crime variant will play out. Right. When are you expecting travel to resume especially the opening on borders with the mainland and how is that being factoring into your base case assumption for these stocks. So so last year visitation into Macao from China was running at roughly 20 percent of what it was pre pandemic. So we're significantly behind on the travel resumption largely because most of the travel restrictions are still in place. We would expect Hong Kong to reopen for Macao and it has been closed for almost two years now sometime in the spring perhaps late March perhaps April. That will be the first impetus to start seeing more return of visitation into Macao. The next key will be the return of route travel from mainland China. We really don't expect that to happen until later in the summer and perhaps even the fall. And obviously the current crop breakdown break out. So we're seeing growth in Hong Kong and in China while still fairly low by by my standards from rest of the world have caused travel disruption within China have caused trade travel barriers to come up. So for the very short term that's still going to be a big issue. But we expect by by summer fall that we'll start getting a significant amount of visitation coming back into the. You prefer sunshine over other casino stocks in the region. And why. So we believe that Sands with its buildout program that it's had over the past two years has repositioned itself in the direction of high end based mass and premium mass with its new product offering. Sands has always been the leader in the mass market in Macao with the retrenchment of the junket industry that we're going to be seeing in Macao. And that's already started. We believe operators that are more exposed and more professional and mass and base mass stand to outperform. So. So from that regard we think Sands is very well positioned with its 12000 13000 hotel rooms and its very large non gaming footprint to draw in for traffic as the visitation recovery resumes.

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Macau Recovery Seen Lagging Peers

Vitaly Umansky, global gaming senior research analyst at Bernstein, discusses Macau’s new proposed gaming law, his investment strategy for the sector and how travel restrictions have impacted the casinos. He speaks on “Bloomberg Daybreak: Asia.” (Source: Bloomberg)

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