HK protests impact on Macau minimal: Morgan Stanley
Street protests that have been affecting Hong Kong for months have so far had a “minimal impact” on casino revenue in neighbouring Macau, said Morgan Stanley Asia Ltd in a note last week.
Tourists make up for the majority of gamblers in Macau. A number of them use Hong Kong to access Macau.
Macau saw close to 2.6 million mainland Chinese visitors in July, up by 18.5 percent year-on-year, according to tourist arrival data released on Wednesday by the city’s Statistics and Census Service. That’s slower than the growth rate (21.7 percent) recorded for the first seven months of this year, wrote Morgan Stanley analyst Praveen Choudhary.
“Assuming mass [gross gaming] revenue [in Macau] grew by 15 percent in July, mass revenue per Chinese overnight visitor would have grown by 9 percent, which is positive in our view,” he added. “This would seem to confirm our view of minimal impact on Macau so far from Hong Kong events.”
Casino gross gaming revenue in Macau fell by 3.5 percent year-on-year in July, to MOP24.45 billion (US$3.03 billion), according to data from the city’s Gaming Inspection and Coordination Bureau. The regulator does not provide an official breakdown of monthly GGR into mass and VIP.
In a previous report, the stockbroking arm of banking group Morgan Stanley had said only 2 percent of all mainland Chinese visitors to Macau go through downtown Hong Kong, where the protests have been most frequent.
A portion of visitors use Hong Kong International Airport – one of the world’s busiest air hubs – to get to Macau. Travel between the two places has been made easier by the opening in October of the Hong Kong-Zhuhai-Macau Bridge, which on the Hong Kong side makes landfall near the airport.
Last week two brokerages on separate notes said the temporary closure of Hong Kong’s airport on August 12 and 13 did not hurt gaming revenue in Macau for the seven-day period from August 12 to August 18.
Hong Kong’s airport authority decided to close temporarily the city’s air hub on August 12 and 13, due to disruption to operations caused by anti-government protests. The decision came after thousands of protesters occupied the facility’s arrivals and departures halls.
Investment analysts have noted in previous commentary on Macau that there need not be a direct correlation between numbers of tourists to Macau and gaming spend in casinos. This is because research indicates that high-stakes play by a relatively small number of visitors is still an important component of the market.
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