The rate of year-on-year slowdown in Macau casino gross gaming revenue (GGR) is likely to be higher in April than it was in March, say several brokerages. The main question they pose – citing daily GGR trends so far this month based on industry unofficial returns – is by how much.
“We estimate GGR for the month should settle at around MOP24 billion [US$2.97 billion] to MOP25 billion,” stated analysts Harry Curtis, Daniel Adam and Brian Dobson of Japanese brokerage Nomura in a Monday update based on Macau market performance in the month so far.
“Although the approximately 5.5-percent year-over-year decline at the midpoint of our estimated range implies approximately 500 basis points of deceleration versus March’s 0.4 percent year-over-year decline, we expect positive growth to resume once we lap the tough +28-percent comparison in April,” added Nomura, referring to what might happen further into the year.
The 0.4 percent year-on-year retreat in March GGR had been a better result than most sell-side analysts had been expecting.
Brokerage Sanford C. Bernstein Ltd said in its Monday note it expected Macau April GGR to be down 4 percent to 2 percent year-on-year, i.e., down 3 percent to 1 percent month-on-month.
“We expect year-on-year comparison to be difficult through [the] end of April, as GGR was very robust in early 2018, until U.S.-China trade tensions heightened,” reiterated Sanford Bernstein.
The brokerage’s analysts – Vitaly Umansky, Eunice Lee and Kelsey Zhu – said channel checks indicated that Macau GGR in the first seven days of April was about MOP5.2 billion, meaning revenue came in at the rate of about MOP742 million a day, or 13 percent down on the corresponding period last year.
The memo added: “One area of potential high-end GGR stabilisation and renewed strength may come from a recovering credit cycle in China, which may support VIP recovery in the second half.”
Improving consumer credit conditions in mainland China had been cited by Nomura in a note last month as a possible cause for optimism in the second half of 2019.
Nomura nonetheless stated in its latest note on Macau, referring to the market’s rolling chip performance so far in April: “VIP volume growth is tracking approximately 8 percent lower sequentially versus last month’s average.”
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