Macau sales hint for November
A number of investment analysts say average daily earnings (ADR) at Macau casinos are slowing as VIP play shows no signs of recovery and popular market business remains sluggish.
“By November 16, Macau’s total gaming revenue (GGR) is expected to be $12.75 billion ($1.6 billion), with an ADR lower than the $850 million in October (after Golden Week) and the $852 million in September,” Credit Suisse AG said.
“The ADR slowed further last week (November 10-16) to 750 million pounds. The [Macao] Grand Prix race on November 13-16 may hurt sales, but the 11% week-on-week drop appears weak,” analysts Kenneth Fong and Isis Wong said.
The Credit Suisse team said the previous month’s GGR could be between $24 billion and $24.7 billion, down 18% and 21% year-on-year, “assuming an ADR of between $800 million and $850 million for the rest of November.” It added this was worse than the expected mid-to-late teenage decline.
Analysts at UBS Securities Asia said in a note on Tuesday that some Macau casino operators reported shorter playtimes on their devices after a ban on bulk casino floor smoking that took effect on Oct. 6.
“Some [operators] also think players typically increase their bets gradually, and smoking breaks say these players start playing again with lower bets, reducing overall play,” analysts Anthony Wong and Angus Chan said.
In a conference call earlier this month, Melco Crown Entertainment’s management said the smoking ban had negatively impacted gambling activity.
“We estimate that this drag may have impacted the public by 6 to 13 percentage points. Together with the continued slowdown in high-end demand, these factors are expected to result in underlying public growth (-5 percent in October) below consensus expectations for single-digit growth in the fourth quarter,” UBS analysts said.
“Over the month of November, we expect VIP/mass to decline by 17% (October -23%) from -20% to -25%/-10% to -15%,” it added.
Wells Fargo Securities LLC also called last week’s earnings “softer than expected.”
“Based on our inspections, holdouts are normal, but volume sales are still weak (negative),” says Cameron McKnight-led Wells Fargo analysts.
“We continue to remain on the sidelines of the Macau market because we believe China’s policy setting is having a negative impact on growth. In particular, (1) visa restrictions, (2) anti-corruption movements, (3) credit declines, and (4) weakening housing markets are all contributing to Macau’s economic slowdown,” the brokerage said.바카라사이트
“We expect Macau game sales growth in November to be -18% from our previous expectations of -16%, down from -18% to -21%,” added Wells Fargo team.