A rebound in
Macau’s casino revenue accelerated in July as spending by high-rollers
continued to add momentum to the year-long recovery despite China’s
efforts to curb capital outflows.
Gross gaming receipts in the world’s largest
gaming hub rose for a 12th straight month, increasing 29% to 23 billion
patacas (US$2.9bil), according to data released by Macau’s Gaming
Inspection and Coordination Bureau yesterday. That topped the median
estimate for a 26% increase in a Bloomberg survey of nine analysts, and
is the biggest gain since February 2014.
Macau’s gaming revenue has been steadily
recovering after China’s corruption crackdown and slowing economy hit
the market for more than two years. While an improving economy and the
opening of new facilities have helped bring players back to Macau, the
outlook still bodes uncertainties as Chinese authorities introduce
efforts to halt hundreds of billions of dollars worth of outflows, some
of which exit the mainland via gambling operations.
“Risk of heightening enforcement and
potential policy pressures we had flagged have certainly not gone away,”
said Daiwa Capital Markets Hong Kong Ltd analyst Jamie Soo in a note
yesterday. “Some of the pressure on the gaming revenue does take time to
manifest itself, and the seasonal impact of stronger mass numbers for
summer months may very well smooth out the potential negative impact of
this in the near term.”
Still, the third quarter looks to be off to a
strong start, and the market will likely react favourably to the
numbers, Soo added.
Wynn Macau Ltd shares rose as much as 1.2%
before paring its advance after the data’s release yesterday. MGM China
Holdings Ltd, which was raised to a buy at Morningstar, trimmed gains
after climbing 2.3%.
Bloomberg Intelligence’s index of Macau
gaming stocks has rallied 20% this year through Monday. Wynn Macau
surged 37% in the period, while Galaxy Entertainment Group Ltd jumped
43%.
The recovery is still susceptible to any
renewed anti-corruption crackdowns from the mainland, especially as
China gears up for the 2017 party congress this fall. Investor concerns
remain amid reports of mainland police investigating questionable money
transfers and freezing accounts of junket operators who ferry in wealthy
players to gamble large sums on credit.
Macau regulators are also requiring facial
recognition and identification card checks at ATMs to curtail the
overseas shifting of currency.
Revenue from high rollers, which was hurt
the most amid the downturn, has shown a faster pace of recovery this
year. It grew 35% in the second quarter, better than the 8.1% in the
market for recreational gamblers, according to the city’s gaming
regulator.
“VIP segment, for now, continues to see
broad recovery across big and smaller junkets, a trend admittedly well
above what we had envisioned,” JPMorgan Chase & Co analyst D.S. Kim
said in a note before the revenue data release.
Source :
1) www.thestar.com.my
2) Bloomberg
