• About Us
  • The Team
  • Advertise with Us

The latest news on the gaming industry in Asia

() () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () ()
  • Home
  • Macau
  • Philippines
  • Singapore
  • Japan
  • Rest of Asia
  • World
  • Industry Talk
  • Trends & Tech
  • iGaming
  • follow
    • Facebook
    • Twitter
    • RSS Feed
    • LinkedIn

Macau mass GGR may be hit by RMB slide: analysts

Aug 13, 2015 Newsdesk Latest News, Macau, Top of the deck  


Macau mass GGR may be hit by RMB slide: analysts

The 1.9 percent devaluation in China’s currency the renminbi – initiated by the country’s central bank on Monday – “could have 8 percent to 10 percent downward impact” on mass gross gaming revenue (GGR) in Macau in 2016, said a note from Daiwa Securities Group Inc.

“We expect the scenario of a significant drop in the Chinese yuan to directly impact Macau’s Hong Kong dollar-denominated mass gaming GGR,” said Daiwa analysts Jamie Soo, Adrian Chan and Jennifer Wu in a note on Wednesday.

They said the main threat was to gambling fuelled by cross border money transfer via Macau’s pawnshops, which operate on thin margins and can quickly feel the effects of a 1.9 percent plus devaluation in the renminbi, sometimes referred to as the RMB, the yuan, or ‘CNY’.

The brokerage said that its “back-of-envelope stress test” indicated that an 8 percent to 10 percent fall in mass GGR “would have a 13 percent to 16 percent negative impact on sector EBITDA [earnings before interest, taxation, depreciation and amortisation]”.

Union Gaming Securities Asia Ltd analyst Grant Govertsen stated – in comments reported on Thursday by the Macau Daily Times newspaper – that “based on the current 2-percent decline in value of the renminbi, we would expect the mass market story to be negatively impacted by up to 2 percent over the coming weeks or months.”

The People’s Bank of China allowed the renminbi to drop further against the U.S. dollar on Wednesday. In a statement earlier this week, the Chinese central bank said that it had changed the way it calculated the currency’s daily midpoint against the U.S. dollar, now taking the midpoint from market-makers’ quotes and the previous day’s closing price.

Although the Macau government reports its casino GGR in the territory’s currency the pataca (also known as MOP), most bets at Macau casinos are denominated in Hong Kong dollars, a currency currently pegged to the U.S. dollar. The pataca is indirectly pegged to the U.S. dollar via an association with the Hong Kong dollar, whereby MOP1.03 is equal to HKD1.00.

Hong Kong-based analysts from Daiwa focused in particular on the implications of China’s currency devaluation for those mass gambling volumes that are funded or part funded by cross border money transfer transactions effected at Macau’s secondhand jewellery shops and pawnshops. Those premises are typically found in clusters close to the city’s downtown casinos, and operate on basis points of margin.

“We are seeing the impact already,” wrote the Daiwa team. “Our on-the-ground checks indicate that foreign exchange has become more expensive, with the CNY-HKD spread charged by the jewellery and pawnshop operators widening by 50 to 100 basis points over the past three days.”

The Daiwa team noted, referring to China’s state-approved money transfer system operated by China UnionPay Co Ltd: “The jewellery/pawn shops… have historically provided much of the UnionPay liquidity to the mass and premium mass segments. These businesses keep sizable balances of HKD and Chinese yuan in both Macau and China to fund their services, and charge a spread over the prevailing HKD/CNY exchange rate, which they take as profit.”

Daiwa added: “We think a further UnionPay-related liquidity squeeze is possible in the coming months.”


  • tweet
Related articles
  • US$39mln maybe for other SJM self promoted sites: Daiwa
    US$39mln maybe for other SJM self...

    May 31, 2022  

  • Macau gaming bill positive to sector: brokerages
    Macau gaming bill positive to sector:...

    Jan 17, 2022  

More news
  • Alvin Chau and prosecution appeal court sentence
    Alvin Chau and prosecution appeal court...

    Feb 08, 2023  

  • LVS ranked by S&P as most sustainable casino sector firm
    LVS ranked by S&P as most...

    Feb 08, 2023  


Latest News

Alvin Chau and prosecution appeal court sentence

Alvin Chau and prosecution appeal court sentence

Feb 08, 2023  

The defence and the prosecution have respectively appealed against a Macau court’s sentencing decision that encompassed Alvin Chau Cheok Wa, former boss of now-defunct Macau casino junket...
Read More
LVS ranked by S&P as most sustainable casino sector firm

LVS ranked by S&P as most sustainable casino sector...

Feb 08, 2023  

Crane aims to complete split into 2 listed entities by April 3

Crane aims to complete split into 2 listed entities by...

Feb 08, 2023  

Sign up to our FREE Newsletter

UB8V5.qr.16(Click here for more)

Pick of the Day

"The company will scrutinise the [26 Capital] lawsuit and properly deal with it"

Universal Entertainment

Japanese firm that controls the Okada Manila casino resort in the Philippines



Most Popular

  • Macau mulls subsidy of up to US$62 per overseas visitorMacau mulls subsidy of up to US$62 per overseas visitor February 7, 2023
  • Macau early Feb average daily GGR higher than Jan: JPMMacau early Feb average daily GGR higher than Jan: JPM February 6, 2023
  • Ex-junket boss Levo Chan aimed to go to Taiwan: policeEx-junket boss Levo Chan aimed to go to Taiwan: police February 7, 2023
  • SPAC partner in Okada Manila listing sues Universal Ent sideSPAC partner in Okada Manila listing sues Universal Ent side February 7, 2023
Copyright 2014-2023 TEAM Publishing and Consultancy Ltd / All rights reserved
  • Code of Ethics
  • Privacy Policy
  • Useful Links
  • Contact Us