The average daily rate of casino gross gaming revenue (GGR) generated in Macau increased sequentially in the second week of March say several brokerages, citing unofficial industry returns.
Some institutions base their numbers on revenue from table games-only. The institutions estimate that judged year-on-year, aggregate March GGR will decline in the range of 14 percent to 22 percent compared to the same period in 2015. It would extend to 22 months the year-on-year losing streak for the city’s casino revenue.
Brokerage Sanford C. Bernstein suggested in a Monday note that the average daily rate of revenue generated market wide for the March 7 to 13 period inclusive was approximately MOP628 million (US$78.6 million) which it described as an increase of around 18 percent week-on-week and “better than our expectation”.
“We believe the sequential improvement is helped by both higher volume and VIP hold rate,” said analysts Vitaly Umansky and Simon Zhang.
Analysts Richard Huang and Stella Xing of Japanese brokerage Nomura said in a Tuesday note, quoting an 8 percent week-on-week improvement in GGR based on tables-only: “While we are happy with… [a week-on-week] improvement in GGR run-rate, we can’t help but notice that there is little improvement in industry fundamentals, with the surprise coming mainly from the low-margin VIP business.”
Referring to the period after the Chinese New Year holiday, which this year fell in early February, Daiwa Securities Group Inc analysts Jamie Soo, Adrian Chan and Jennifer Wu noted: “On the ground, we continue to observe an overall tapering off of run-rates across properties post peak season.”
“At the current run rate, we continue to expect March to see a 13 percent year-on-year decline in GGR, likely reaching all-in GGR of [about] MOP18.6 billion,” said the Daiwa team.
David Katz and Brian Davis of Telsey Advisory Group LLC said in a Monday note: “While the slight improvement this past week is promising, we note that the March results month to date are worse than the decline we have forecast thus far and indicate that the flattish February results were driven by easy comparisons rather than meaningful improvement in market fundamentals.”
Telsey added that while February GGR was roughly flat year-on-year compared to a 48.6 percent decline for GGR in February 2015; the comparison figure for this March is a 39.4 percent decline in March 2015.
“Comparisons will remain progressively harder going forward for the next several months,” said Mr Katz and Mr Davis.
