GGRAsia – Macau GGR could rise 6 pct sequentially in 3Q: MS

Macau GGR could rise 6 pct sequentially in 3Q: MS

Sep 06, 2016 Newsdesk Latest News, Macau, Top of the deck

Macau’s casino gross gaming revenue (GGR) could register third-quarter growth of 6 percent judged sequentially, says a note from Morgan Stanley Asia Ltd.

In the second quarter, Macau casino GGR was MOP51.61 billion (US$6.46 billion) according to the local regulator, the Gaming Inspection and Coordination Bureau, also known as DICJ.

“If we assume September GGR to be an average of July and August, we could see GGR growth of 6 percent quarter-on-quarter in third quarter 2016,” stated analysts Praveen Choudhary and Alex Poon in a recent note.

A 6 percent rise quarter-on-quarter would amount to approximately an extra MOP3.10 billion in the third quarter compared to the second, creating a third-quarter tally of MOP54.71 billion, or a monthly average of MOP18.23 billion.

In July, Macau casino GGR fell by 4.5 percent judged year-on-year. It was part of a trend of a sequential monthly narrowing in contraction that began in the second quarter of 2016.

In August, the monthly tally rose 1.1 percent year-on-year, marking the first time in 27 months that such revenue had not contracted, judged year-on-year.

A number of investment analysts had predicted earlier this year a return to Macau GGR growth in the second half of the year.

Nonetheless, Macau’s Secretary for Economy and Finance, Lionel Leong Vai Tac, issued on Saturday words of caution on the outlook for Macau GGR in September.

Macau’s September GGR was often seasonally weaker than that of August, he observed. The bulk of September typically marks a hiatus between the high demand of the summer months, and the pickup in demand for the so-called “Golden Week” holiday surrounding China’s national day on October 1.

Mr Leong had said on June 8 that the government was maintaining its 2016 forecast for the city’s casino GGR at MOP200 billion.

Brokerage Daiwa Securities Group Inc said in a note in late August that if Macau’s 2016 GGR did come in at that level, it would amount to “effectively a 13-percent year-on-year contraction, well below the Street’s forecast of a 5-percent decline”.