Gross gaming revenue in Macau was tracking about 4% lower in the first 25 days of August, according to broker estimates posted this week, leading analysts to converge on a minor year- on-year contraction of up to 4% for the entire month.
Broker Citigroup estimated that Macau had accumulated about 20.6 billion patacas ($2.55 billion) in gross gaming revenue during the first 25 days of August. Citing industrial channels, analysts at the firm wrote that the average daily run rate was about MOP828 million last week, down from MOP871 million a week earlier. The broker said it has decided to hold its August forecast flat at MOP26.5 billion.
Analysts at Sanford C. Bernstein, who also estimated MOP20.6 billion in gross gaming revenue for the first 25 days of August, take a more conservative view of the remainder of the month. They maintain that the year-on-year decline will lead end-month revenues down between 2 and 4%.
The Bernstein analysts suggested that the impact of Typhoon Lekima and the ongoing transport disruptions caused by the unrest in Hong Kong may have dampened gambling revenues in Macau. Nevertheless, the influence of the protests themselves on the casino sector was “immaterial,” the broker said.
That was a view shared by Nomura, which wrote on Monday that “the protests in Hong Kong do not appear to be having an impact on the weekly GGR [gross gaming revenue] numbers,” according to gaming news website GGRAsia.
JPMorgan also said that the unrest in Hong Kong would have a minor effect on Macau revenue. “[The] actual impact on [Macau’s] gaming demand should be smaller than on visitation” to the city, JPMorgan’s Asia-Pacific team said in a recent note.
Gross gaming revenue in August 2018 amounted to MOP26.56 billion, up 17.1% from a year earlier. The month proved to be one of the strongest for the entire year, and would frame even a strong result this month as a year-on-year decline in percentage terms.
For the first seven months of the year, accumulated gross gaming revenue is tracking about 0.9% lower than in 2018. A posting of MOP26.5 billion would make August the strongest month of 2019 to date.
Despite the minor contraction this year, most analysts hold the view that the sector has generally resisted headwinds including trade war uncertainties and a weaker Chinese economy, possibly assisted by an approximate 20% growth in the number of tourists coming to the city.
The Gaming Inspection and Coordination Bureau is expected to release the official figures for August on Sunday. DB
No Comments