• About Us
  • The Team
  • Advertise with Us

The latest news on the gaming industry in Asia

() () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () ()
  • Home
  • Macau
  • Philippines
  • Singapore
  • Japan
  • Rest of Asia
  • World
  • Features
  • Industry Talk
  • Trends & Tech
  • follow
    • Facebook
    • Twitter
    • RSS Feed
    • LinkedIn

China policy, not sentiment, Macau stock driver: analysts

Sep 13, 2016 Newsdesk Latest News, Macau, Top of the deck  


China policy, not sentiment, Macau stock driver: analysts

A change in China’s investment regulations, rather than market sentiment, could be a key value driver for Macau gaming stocks, suggests a Monday note from Japanese brokerage Nomura.

Nomura said Macau had recently seen a “strong boost to sentiment; but little change in fundamentals”. It said a price rally in Macau gaming stocks had been supported by three events: casino gross gaming revenue (GGR) growth turning positive in August; the Macau government announcing its five-year development plan; and the China Insurance Regulatory Commission allowing Chinese insurers to invest in Hong Kong-listed equities.

Nomura stated: “The most significant change, in our opinion, is the regulatory change allowing Chinese insurers to invest [in] Hong Kong-listed equities as our China strategist believes companies with strong cash flows and dividends, like Macau stocks, are likely to be key beneficiaries.”

A note last week from Deutsche Bank AG had suggested the Macau casino market was – following 26 months of year-on-year declines in casino GGR – at the beginning of a recovery driven by play in the mass segment.

Deutsche Bank had said that in the second quarter, Macau’s mass-market GGR was up 4 percent year-on-year. The local regulator, the Gaming Inspection and Coordination Bureau, had reported mass-market baccarat GGR as only having grown by 0.2 percent in the second quarter.

A number of investment analysts have said that disparities between official numbers for the mass segment and those from the investment community relate to an under-reporting of mass play in the gaming bureau figures, due to “table reclassification” by operators so that patrons can smoke at the table.

Analyst Christopher Jones of the Buckingham Research Group Inc said in a Monday note – after meeting senior management from Macau operators Galaxy Entertainment Group Ltd and MGM China Holdings Ltd: “While both managements are optimistic about the longer-term, they were hesitant to call the bottom on Macau at this point, wanting to see how the market handled all the incremental supply.”

The Parisian Macao, the latest Macau gaming and entertainment resort from Sands China Ltd, was due to open to the public on Tuesday (September 13). The launch comes only weeks after the opening of the US$4.2-billion Wynn Palace, promoted by Wynn Macau Ltd, prompting some analysts to fret about the risk of oversupply in the current market.

A Monday note from brokerage Sanford C. Bernstein Ltd said that – based on unofficial industry data so far for this month – the institution expected September to post year-on-year GGR growth market wide.

“Our channel checks indicate that Macau’s GGR month-to-date is [about] MOP7.3 billion [US$913.6 million], implying an ADR (average daily rate) of [about] MOP663 million,” wrote analysts Vitaly Umansky and Yang Xie.

“We currently estimate that September GGR will… [be] +8 percent to +11 percent,” they said, based on the assumption of an average daily rate of MOP590 million to MOP620 million for the remainder of the month.

“For second half 2016, we estimate that GGR will show +3 percent year-on-year growth (VIP -9 percent and mass +15 percent),” they added.

David Katz and Brian Davis of brokerage Telsey Advisory Group LLC, said in a Monday note: “September GGR is up against a comparison of a 33.0 percent decline [for the prior-year period], which is slightly harder than August’s 35.5 percent decline. Comparisons will become marginally more challenging in October and December when the prior-year declines were 28.4 percent and 21.2 percent, respectively. We note that August was the first month of fundamental GGR growth in Macau since May 2014.”


  • tweet
Related articles
  • Nevada sell-off by LVS may aid dividend return: Bernstein
    Nevada sell-off by LVS may aid dividend...

    Mar 04, 2021  

  • Macau casino GGR soared in final days of CNY: brokerages
    Macau casino GGR soared in final days...

    Feb 23, 2021  

More news
  • Fitch says LVS Nevada sale slight negative, Moody’s keener
    Fitch says LVS Nevada sale slight...

    Mar 05, 2021  

  • Travel ban on casino hub Sihanoukville: reports
    Travel ban on casino hub Sihanoukville:...

    Mar 05, 2021  


Latest News

Fitch says LVS Nevada sale slight negative, Moody’s keener

Fitch says LVS Nevada sale slight negative, Moody’s keener

Mar 05, 2021  

Despite United States-based casino group Las Vegas Sands Corp (LVS) being in line to generate US$6.25 billion from the sale of its Las Vegas, Nevada assets, Fitch Ratings Inc said in a Thursday memo...
Read More
Travel ban on casino hub Sihanoukville: reports

Travel ban on casino hub Sihanoukville: reports

Mar 05, 2021  

Melco says City of Dreams in Cyprus open summer 2022

Melco says City of Dreams in Cyprus open summer 2022

Mar 05, 2021  

Sign up to our FREE Newsletter

UB8V5.qr.16(Click here for more)

Partners

Pick of the Day

“Prolonged closure of operations could derail earnings recovery and weigh on NagaCorp’s credit quality"

Junling Tan, Yu Sheng Tay and Vikas Halan

Analysts at credit rating agency Moody’s Investors Service



Most Popular

  • Lim Kok Thay, GEN Singapore execs in US$1.3mln stock awardLim Kok Thay, GEN Singapore execs in US$1.3mln stock award March 2, 2021
  • Las Vegas Sands to sell off Nevada assets for US$6.25blnLas Vegas Sands to sell off Nevada assets for US$6.25bln March 3, 2021
  • Covid-19 test cert no longer needed for Macau casino entryCovid-19 test cert no longer needed for Macau casino entry March 2, 2021
  • Galaxy Macau to add Raffles-branded hotel towerGalaxy Macau to add Raffles-branded hotel tower March 1, 2021
  • Macau casino GGR down 9pct m-o-m in February: govtMacau casino GGR down 9pct m-o-m in February: govt March 1, 2021
Copyright 2014-2021 TEAM Publishing and Consultancy Ltd / All rights reserved
  • Code of Ethics
  • Privacy Policy
  • Useful Links
  • Contact Us