Asset manager Sanford C. Bernstein Ltd forecasts that gross gaming revenue (GGR) in Macau will grow to between MOP23.2 billion (US$2.87 billion) and MOP23.8 billion in September, or 8 percent to 11 percent more than the same time last year.
A second brokerage has a more bullish estimate for this month’s GGR. Japanese Nomura predicts that Macau’s monthly GGR will be between MOP24 billion and MOP25 billion, representing an increase of about 15 percent in year-on-year terms, in research published on Monday.
Sanford Bernstein said its forecast assumes average daily GGR between MOP770 million and MOP800 million for the rest of this month. The note’s authors – Vitaly Umansky, Zhen Gong and Kelsey Zhu – said their channel checks indicate that average daily GGR in the first nine days of September were about MOP777 million. Their data suggests the VIP gaming market hold rate was above normal, adding to volume in that market segment, and that mass-market GGR was about 10 percent lower than in the corresponding period last month.
“We continue to voice caution about the strength (and volatility) surrounding VIP,” said the Sanford Bernstein team. “Significantly shifting hold rates in VIP creates volatility and lack of ability to more accurately forecast the monthly trend.”
The 15-percent year-on-year lift implied by Nomura’s estimate “calls for a [circa] 200 basis points deceleration versus August GGR growth of +17.1 percent,” wrote analysts Harry Curtis, Daniel Adam and Brian Dobson.
“Given sentiment as poor as it is now, we expect mid-teens percentage GGR growth for the month of September would be viewed a positive catalyst for the group,” they added.
In its Monday memo, Nomura said its forecast assumes that GGR will decline sequentially in line with the trailing six-year median.
The Japanese brokerage predicts average daily volume in the VIP market was about 7.5 percent lower than in the corresponding period last month, and that the VIP market hold rate was about 3.1 percent – more than the normalised hold rate of between 2.7 percent and 3 percent. Mass-market average daily GGR was about 10 percent less than last month, said Nomura.
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Vitaly Umansky, Kelsey Zhu and Eunice Lee
Analysts at brokerage Sanford Bernstein