Playtech’s stock rebounded only days after suffering a 22 percent drop in its share price, caused in part by a new regulatory assault on iGaming in Malaysia.
Shock waves were sent through Playtech’s and other exposed gaming company share prices, when the hitherto grey market announced in late October a fresh crackdown on its residents accessing gaming sites and apps.
“Special attention should be given to improve online gambling laws because online gambling activities, which can be conducted via smartphones, are becoming rampant right now,” said deputy prime minister Ahmad Zahid Hamidi.
Changes will subsequently be made in the country’s Common Gaming House Act 1953, said Zagid, but did not specified whether a change will come through an amendment or new act of parliament.
According to analysts at Investec, software supplier Playtech, generates five percent of its revenues from Malaysia, or E709m in 2016. The firm saw its share price slashed 22 percent with the news. But UBS later pointed out this meant investors had overly adjusted risk to value all Playtech’s unregulated markets at no more than one year’s earnings.
The bank argued that was far too cheap when compared to other similarly placed firms such as GVC and 888 – and failed to account for the probability of re-rating as regulated market income increases. Playtech’s stock swiftly bounced back.