“Cautious optimism” among analysts
Financial indicators show recession-scarred Macau could finally be on the road to recovery, reports Bloomberg News.
Almost across the board, casino stocks rebounded in Hong Kong trading by an average of 23 percent since January 21. That includes Sands China, Wynn Macau, Galaxy Entertainment Group, SJM Holdings and MGM China Holdings. Sands China led the pack, winning 23.2 percent of GGR for the period.
The news could spark a welcome rally and restore some lost value to the embattled jurisdiction, which saw gaming revenues decline 34.3 percent in the last year.
Despite that cheerful news and the fact that tourism numbers were up 4 percent for the Chinese New Year, the Macau Business Daily reports that local retailers saw a year-on-year decline in business during the peak holiday period.
“Our sales were not driven up by the increase in visitors,” said Alan Wong Yeuk Lai, managing director of the Choi Heong Yuen Bakery. “The business performance for this CNY is not so good—we’ve registered a decline of 10 per cent compared to the same period last year.”
He blamed the downturn on “the change in visitor structure and tourists’ sentiments to consume,” referring to the loss of big-spending VIPs who once flocked to Macau, and a softer Chinese economy, which may be causing mass-market tourists to moderate their spending, even on holiday.
Union Gaming said it is “cautiously optimistic” about a recovery in Macau this year. In Barron’s Asia, analyst Christopher Jones wrote, “On the Peninsula, we are hearing that mass, premium mass and VIP are all trending at least in line with management’s plan, with larger crowds and minimum bets than in recent months.
“Over on Cotai, we heard roughly the same thing from management who were generally pleased. Overall, it seems that things are moving in the right direction.”
GGRAsia reported that Macau welcomed 730,000 visitors in the first five days of the week-long New Year celebration; almost 70 percent hailed from the Chinese Mainland.
Analysts at the brokerage firm Daiwa Securities Group project that GGR for the month of February will fall by 4 percent on a monthly basis. Daiwa said the figures are a “healthy start” to the CNY period, and the Daily Times cited called it a “promising beginning to the new year,” which may be aided by the opening of the Taipa Ferry Terminal in mid-2016. Daiwa said the ferry may likely shift the market activity away from the Peninsula and toward the Strip.
