The pace of year-on-year growth in June for Macau casino gross gaming revenue (GGR) is likely to accelerate to the sort of levels seen in March and April, after the significant slowing witnessed in May. That is the view expressed respectively in Monday notes by several brokerages.
Sanford C. Bernstein Ltd cited unofficial data from the industry for the month to date, and estimated daily GGR performance for the remaining days of June.
“Assuming a GGR average daily rate of MOP730 million [US$90.3 million] to MOP750 million for the remaining days of the month, we estimate June GGR to a range of MOP24.1 billion and MOP24.2 billion, an estimated year-on-year increase in June of +20 percent to +21 percent,” wrote analysts Vitaly Umansky, Zhen Gong and Kelsey Zhu.
A Monday note from JP Morgan Securities (Asia Pacific) Ltd estimated that Macau’s June GGR would register expansion in the 20s of percent judged year-on-year.
The rate of year-on-year growth in Macau monthly GGR had more than halved in May, to 12.1 percent, compared to April’s 27.6 percent expansion. In March the improvement had been 22.2 percent year-on-year, according to data released by the city’s casino regulator, the Gaming Inspection and Coordination Bureau.
Sanford Bernstein stated, referring the period June 19 to June 24: “The average daily rate… was approximately MOP716 million, which is 3 percent above a similar period last year (June 19 to 25 2017).”
The institution added, referring to the 2018 FIFA World Cup, an international soccer tournament taking place in Russia; and to the Macau casino hold rate for baccarat, the pursuit of choice for Macau VIP table games gamblers: “GGR was slower last week due to the World Cup and a lower VIP hold rate. Month-to-date, the VIP hold rate was at [the lower end of] the range. Both mass GGR and VIP volume were flat month-on-month compared with the May average daily rate number.”
JP Morgan analysts DS Kim and Sean Zhuang said in their Monday memo regarding June market performance that last week’s GGR was likely to have been circa MOP715 million per day, “which is quite decent/resilient in our view, especially considering the slow seasonality post the holiday and negative impact from the World Cup.” That was a reference first to the period after May’s Golden Week holiday in China, around the time of Labour Day on May 1; and second to a reduction in Macau casino betting volume typically said to coincide with some major soccer tournaments.
A Friday note from Morgan Stanley Asia Ltd had suggested that – aside from the VIP hold rate issue – a sequential decline in May regarding the growth rate of arrivals by mass-market visitors to Macau, had had an impact on casino GGR for that month.
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Vice president and senior credit officer at Moody’s Investors Service