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Coronavirus: SkyCity share price falls as NZ restrictions tighten

A number of Kiwi companies are providing an update this morning as New Zealand tightens its coronavirus restrictions. The SKYCITY Entertainment Group Limited (ASX: SKC) share price is down 5.16% at the time of writing  after the gaming group provided an update on the operational impacts.

What did SkyCity announce?

SkyCity advised that its Auckland casino and entertainment facilities would be closed.

This comes as the New Zealand Government reinstates COVID-19 restrictions after four new cases popped up in Auckland. The government said late on Tuesday night that the new cases were likely to be from community transmission.

SkyCity’s Auckland hotels will remain open to accommodate existing guests currently staying in-house, pending further advice.

The SkyCity share price could be one to watch in early trade as investors react to the news.

Notably, SkyCity’s Adelaide Casino is unaffected by the latest targeted restrictions and remains open.

What does this mean for the SkyCity share price?

Further lockdowns can’t be good news for the SkyCity share price. While New Zealand managed 102 days without any known COVID-19 cases, that streak has now come to an end.

Shares in the Kiwi entertainment group are down 35.7% in 2020 largely thanks to the March bear market.

The big question for investors is just how long the latest restrictions will last. If New Zealand can quickly contain the outbreak, the earnings impact of the Auckland casino shutdown may be minimal.

What about other ASX entertainment shares?

It’s worth keeping an eye on some of SkyCity’s ASX peers this morning.

I think the Star Entertainment Group Ltd (ASX: SGR) share price could be one to watch.

Star Entertainment shares have fallen 41.0% this year as investors fear a long period of reduced foot traffic. That’s partly due to coronavirus capacity restrictions and also immigration restrictions preventing VIP visits.

Both the Star and SkyCity share prices are significantly underperforming the S&P/ASX 200 Index (ASX: XJO) which is down 8.2% in 2020.

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Motley Fool contributor Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Sky City Entertainment Group Ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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