Several stockbrokers are forecasting that gross gaming revenue (GGR) in Macau casinos will be higher in September than a year ago, as the VIP segment showed signs of recovery in the first eight days of the month.
Sanford C. Bernstein Ltd and the stockbroking arm of Nomura issued on Monday notes to investors estimating that daily Macau casino GGR through the first eight days of September was about MOP763 million (US$94.5 million).
Nomura analysts Harry Curtis, Daniel Adam and Brian Dobson said the daily GGR tally between September 1 to 8 was down circa 3 percent sequentially from the average in August but “roughly in line” with the brokerage’s expectation.
“We believe GGR/day benefitted from a higher weekend (Friday and Saturday) to weekday ratio, which helped daily GGR by an estimated [circa] MOP29 million,” said the Nomura team.
The Nomura analysts said on Monday that – measured by segment – they estimated that for the calendar month to September 8, average daily VIP play volume was tracking circa 7 percent to 8 percent higher sequentially; while VIP hold percentage was about 2.8 percent. Mass GGR per day was down between 5 percent to 7 percent versus the average in August, they added.
On Monday, Macau’s Secretary for Economy and Finance expressed some concern about the likely performance of Macau casino GGR in September, also suggesting Macau’s exports of services – including gaming-related services – will have seen a year-on-year contraction for the July to September period.
Sanford Bernstein’s analysts Vitaly Umansky, Eunice Lee and Kelsey Zhu said in their Monday memo that the month-to-date average daily rate of GGR was 4-percent higher from the prior-year period. They wrote additionally: “VIP volume is estimated to have improved by mid-to-high single digits in percentage points (month-on-month growth), with hold rate lower than the normal range, however.”
The Sanford Bernstein team said it was reducing its GGR growth estimates for September “to +4 percent to +7 percent year-on-year”, still a decline of up to 7 percent from the August GGR tally.
“GGR for September 2018 was impacted by Typhoon Mangkhut (and brought all Macau casinos to close temporarily for 33 hours over a weekend), which sets up for an easier year-on-year comparison,” stated the analysts.
The Nomura team said in Monday’s note that it assumed September GGR to decline sequentially “in line with its trailing seven-year average”. “We estimate GGR for the month should settle around MOP22 billion to MOP23 billion,” stated the Nomura analysts.
“The roughly 2 percent to 3 percent GGR growth estimate for September implied by our estimate would mean [over] 1,000 basis points of sequential acceleration versus last month’s decline, given much easier one-year growth comps for the balance of the year,” they added.
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"The protests in Hong Kong may have caused some transport disruption and created a headwind to China visitation into Hong Kong (and onward visitation into Macau), but we believe the impact on GGR from the Hong Kong protests has been more minor"
Vitaly Umansky, Eunice Lee and Kelsey Zhu
Analysts at brokerage Sanford Bernstein