GGRAsia – New crackdown reports hurt Macau sentiment: analyst

New crackdown reports hurt Macau sentiment: analyst

Aug 29, 2014 Newsdesk Latest News, Macau, Top of the deck

Macau’s gross gaming revenue for August is trending toward a 5 percent decline judged year-on-year, said a note from Credit Suisse AG in Hong Kong on Friday evening.

The bank on Tuesday had said it was expecting a 4 to 6 percent drop.

The research team added that sentiment wasn’t helped by media reports out of mainland China on Friday suggesting some officials in Beijing had been asked to surrender their passports to the authorities as part of the central government’s anti-corruption drive.

“Beijing Youth Daily reported today that Beijing city is tightening approvals for personal trips overseas by officials of divisional level and above. Many government agencies in the city asked officials to hand in their passports,” wrote Credit Suisse analyst Kenneth Fong.

“Although this measure is not likely to directly impact Macau as the officials have found it difficult to get visas to come to Macau anyway, it hurts sentiment, especially when the revenue trend recovery has been slow,” added Mr Fong.

Media reports of fresh protests by Macau casino workers against their employers might also have added to any investor disquiet. There was red across the board on Friday in Hong Kong trading of Macau casino names. Wynn Macau Ltd led the bears, losing 1.98 percent to HKD29.70 (US$3.80).

Credit Suisse’s latest market estimate for August was made after receiving unofficial industry returns on average daily revenue rates for Macau’s casino industry up to August 24, which Mr Fong described as “soft” for the summer holiday season.

“Macau gaming revenue up to 24 August… was MOP23 billion [US$2.9 billion], implying an average daily revenue of MOP958 million month-to-date, similar to the level before the [FIFA] World Cup,” stated Mr Fong.

“By business segments, we estimate that the mass-market revenue would be up about 20 percent year-on-year while [the] VIP segment is likely to drop high-teens year-on-year on [a] full month basis,” he added.