Brokerage Deutsche Bank Securities Inc says it still expects Macau casino market gross gaming revenue (GGR) can make year-on-year gains in the second half of this year. But it adds an important proviso is that the occurrence of a new coronavirus in the Chinese gambling hub is controlled in a timely way.
“To the extent the spread of the coronavirus is contained, we believe the fundamental backdrop of flattish first-half 2020 market trends followed by a sustained second-half 2020 GGR inflection remains reasonable,” wrote analysts Carlo Santarelli and Steven Pizzella in a Thursday memo.
They were referring to the fact that on Thursday Macau confirmed a second case of viral pneumonia linked to a newly-identified coronavirus originally reported in Wuhan in Hubei province, mainland China.
The same day, the city cancelled its Chinese New Year festivities. Macau’s leader also said, in response to reporters’ questions, that the outbreak control effort could not exclude he possibility of the government requesting a closure of the city’s casinos.
Ambrose So Shu Fai, vice-chairman and chief executive of Macau casino operator SJM Holdings Ltd,suggested on Thursday that the city’s gaming business during the week-long Chinese New Year festive period – which starts on Friday – was likely to be negatively affected by the coronavirus outbreak in the mainland.
In 2019, Macau casino GGR had fallen 3.4 percent, according to data announced on January 1 by the city’s government. A number of investment analysts had said one reason for that was likely to have been Chinese consumer sentiment linked to concerns about the United States-China trade war.
Deutsche Bank noted in its Thursday memo, addressing the current trading situation in the Macau market: “While concerns around the coronavirus have taken a bit of steam out of the Macau names this week, we continue to see data points that we believe speak well to VIP stability and continued double-digit mass growth in Macau into 2020.”
The analysts also noted there might be opportunities to acquire Macau-linked gaming stocks at reduced prices.
“Given the media headlines, and legitimate concerns related to the spread of the virus, we believe opportunities to accumulate shares at better entry points are likely to present themselves in the coming days/weeks,” wrote the Deutsche Bank team.
Oct 22, 2021Starting from the stroke of midnight on October 24 (Sunday), travellers arriving in China’s capital Beijing from Macau are no longer required to undergo a 14-day period of “centralised medical...
”Our own consensus is that any newcomers to this [junket] sector should be corporatised, and should be financially sound and able to commit a higher guarantee deposit”
Kwok Chi Chung
President of junket trade body, the Macau Association of Gaming and Entertainment Promoters