• 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
  • Features
  • Industry Talk
  • Trends & Tech
  • follow
    • Facebook
    • Twitter
    • RSS Feed
    • LinkedIn

New UnionPay limits show Beijing scrutiny: analysts

Dec 09, 2016 Newsdesk Latest News, Macau  


New UnionPay limits show Beijing scrutiny: analysts

The Monetary Authority of Macao is planning to cut in half the amount of cash China UnionPay bank cardholders can withdraw from ATM machines in the city, reports the South China Morning Post newspaper. The move to cut the daily withdrawal limit to MOP5,000 (US$626) is expected to take effect from Saturday, the media outlet said.

“This is consistent with our view that explosive growth, driven in part by accelerating VIP, at a time of capital flight from mainland China, would bring scrutiny,” said analysts Carlo Santarelli and Danny Valoy from Deutsche Bank Securities Inc.

“While our cautious view remains unchanged, we think this again reminds investors of the difficulties of investing in Macau, most notably when VIP/high-end mass are driving the market,” they added in a Thursday note.

The Deutsche Bank team said however that ATM transaction sourced cash “was never a truly meaningful driver of Macau GGR [gross gaming revenue]”. “We think, more broadly, it’s the messaging that is the issue here,” the analysts added.

Following the news report, U.S.-listed stocks of major casino operators with exposure to Macau – Wynn Resorts Ltd, Las Vegas Sands Corp and Melco Crown Entertainment Ltd – fell more than 11 percent on Thursday. Shares of Macau casino operators listed in Hong Kong opened lower on Friday, all falling more than 6 percent in the early morning session.

Commenting on the news, MGM Resorts chairman and chief executive James Murren said that while revenues would be reduced by the new restriction on UnionPay ATM withdrawals, he was still optimistic about the long-term prospects for Macau. MGM Resorts is the parent company of Macau-based casino operator MGM China Holdings Ltd.

“I think the controls the Chinese government have put into place are consistent with the kinds of controls they have put into place in the past … I don’t want to minimise its significance, it will reduce some gaming revenue. But the long-term play in Macau is an extremely positive story,” Mr Murren said as quoted by U.S. broadcaster CNBC.

The MGM Resorts CEO added: “The Chinese government has done a really good job over many, many years trying to sustain growth for Macau. What they want to see is not a lot of knee-jerk growth or up and down growth, they want to see consistent improvement in tourism and revenue.”

Market impact

The news about the new daily withdrawal limits comes a week after it was revealed that the Macau government was proposing a currency declaration requirement for all travellers to and from the jurisdiction.

The government is proposing that people entering or leaving Macau who have cash or other “negotiable monetary instruments” – for instance, cheques payable to the holder, travellers’ cheques or gold coins – valued at MOP120,000 or more in their possession must submit a declaration form to the Macau Customs Service.

The limit on withdrawals reportedly to be imposed by the Monetary Authority of Macao is designed to further tighten rules on the use of China UnionPay Co Ltd cards, the South China Morning Post said.

Law enforcement officials in mainland China and Macau have been scrutinising UnionPay transactions, as these have reportedly been used as a way for illegally taking cash out of China. Earlier this year, shops in Macau started to introduce UnionPay bank card payment terminals that require holders of China-issued cards to submit an identity document for scanning before their purchase can be confirmed.

In a note on Thursday, brokerage Sanford C. Bernstein Ltd said that most base mass and lower end premium mass customers “should not be materially impacted by the withdrawal limit”.

“However, we know that there are individuals who specialise in utilising hundreds of ATM cards on any given day to withdraw cash and provide liquidity to junket agents and some premium mass players. This is where a slightly greater impact could be felt,” said analysts Vitaly Umansky, Zhen Gong and Yang Xie in their note.

The new development could also strike a blow to Macau-based casino operators just as the city’s gaming market was starting to recover. Macau’s casino GGR rose by 14.4-percent year-on-year in November, marking the fourth consecutive month of growth, according to official data.

Hong Kong-based Chinese-language financial newswires reported last week – quoting a note from analyst Karen Tang of Deutsche Bank AG – that the growth rate for Macau VIP GGR in November was likely to have been 20 percent judged year-on-year.

Analyst Cameron McKnight of brokerage Wells Fargo Securities LLC said that the reported UnionPay restrictions could cause a new shift in the Macau gaming market.

“The new proposed restrictions on currency inflows/outflows could cause a greater reliance on junkets, which would serve to move some premium mass customers back into the VIP segment. This would have a negative impact on property margins,” said Mr McKnight.


  • tweet
Related articles
  • Pansy Ho sells off more stock in MGM Resorts for US$36mln
    Pansy Ho sells off more stock in MGM...

    Feb 23, 2021  

  • MGM China 4Q EBITDA positive, rev up 550pct sequentially
    MGM China 4Q EBITDA positive, rev up...

    Feb 11, 2021  

More news
  • Sci Games title ‘Hurricane Horse’ approved within Apac
    Sci Games title ‘Hurricane Horse’...

    Mar 01, 2021  

  • RGB loss slims sequentially for 4Q, annual loss US$7mln
    RGB loss slims sequentially for 4Q,...

    Mar 01, 2021  


Latest News

Sci Games title ‘Hurricane Horse’ approved within Apac

Sci Games title ‘Hurricane Horse’ approved within Apac

Mar 01, 2021  

Scientific Games Corp says it has approval within Asia-Pacific (Apac) for “Hurricane Horse” (pictured), the third Duo Fu Duo Cai-series game on the DualosX cabinet. The company said in an email...
Read More
RGB loss slims sequentially for 4Q, annual loss US$7mln

RGB loss slims sequentially for 4Q, annual loss US$7mln

Mar 01, 2021  

Macau casino GGR down 9pct m-o-m in February: govt

Macau casino GGR down 9pct m-o-m in February: govt

Mar 01, 2021  

Sign up to our FREE Newsletter

UB8V5.qr.16(Click here for more)

Partners

Pick of the Day

”While our financial results for fiscal 2020 were clearly impacted by the pandemic, they also highlighted our strengths, and the effectiveness of our business’ response"

Trevor Croker

Managing director of casino slot machine maker and digital games provider Aristocrat Leisure



Most Popular

  • Macau VIP challenged by changes in China: Galaxy Ent bossMacau VIP challenged by changes in China: Galaxy Ent boss February 25, 2021
  • Melco’s Lawrence Ho hopeful on Macau recovery in MarchMelco’s Lawrence Ho hopeful on Macau recovery in March February 26, 2021
  • Suncity to open clubs at Londoner Macao, Lisboa PalaceSuncity to open clubs at Londoner Macao, Lisboa Palace February 26, 2021
  • Galaxy Macau to add Raffles-branded hotel towerGalaxy Macau to add Raffles-branded hotel tower March 1, 2021
  • Macau casino GGR soared in final days of CNY: brokeragesMacau casino GGR soared in final days of CNY: brokerages February 23, 2021
Copyright 2014-2020 TEAM Publishing and Consultancy Ltd / All rights reserved
  • Code of Ethics
  • Privacy Policy
  • Useful Links
  • Contact Us