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Philippine property stocks tumble in online casino ban fallout

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Philippine property stocks tumble in online casino ban fallout

(July 23): Philippine President Ferdinand Marcos Jr’s order to ban online casinos targeting Chinese bettors triggered a slump in property stocks on Tuesday, as the shutdown could render many office spaces vacant.

The Southeast Asian nation’s property index slid as much as 2.6%, its biggest drop in a month. Developer DoubleDragon Corp and its real estate investment trust led the slump, falling as much as 11% and 10% respectively.

SM Prime Holdings Inc, Filinvest Land, Inc, Ayala Land Inc, Megaworld Corp and Robinsons Land Corp also all slid more than 2%. The benchmark stock index was slightly lower.

Marcos ordered authorities to shut down Philippine offshore gambling operators, or Pogos, by the end of the year during his Congress speech on Monday, following public scrutiny triggered by a Senate probe. The president said these facilities — which boomed during the administration of Rodrigo Duterte — have stoked crimes including money laundering and human trafficking.

The ban on Pogos may affect the real estate industry as they account for 11% of total gross demand for commercial office space in the country, said Wendy Estacio-Cruz, an analyst at Unicapital Securities.

“However, this is down from last year and from 2019 peak at 25% of total demand. We believe this should affect general sentiment on the property stocks,” she said.

SM Prime doesn’t see any significant impact from the ban, its chief finance officer John Ong said in a phone interview, adding that the company can lease out the vacated space to other businesses. Pogo service providers make up 1% to 2% of the company’s leasable office space compared to 8% before the pandemic, he added.

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