Maybank Research says the messages from Macau and Beijing remain mixed with the recent proposed total smoking ban and Beijing’s new transit visa rules, resulting in it being too early to say which ‘signal’ will prevail.
Assuming July GGR is 5 percent higher month-on-month, Maybank estimates that it will come in at MOP18.9 billion or down 34 percent YoY.
“We acknowledge that there is upside potential due to the recent easing in transit visa rules. That said, we are unnerved by the recent proposal by the Macau government to implement a total smoking ban in early-2016.”
“At this juncture, it is difficult to ascertain whether the relaxed transit visa rules will be more than enough to neutralize the negative impact a total smoking ban may have on Macau GGR. Therefore, we leave our estimates and calls unchanged for now.”
Macau GGR fell 36 percent year-on-year to MOP17.4 billion in June due to poor VIP win rate in the first week, says Maybank.
“We had expected it to fall by a narrower 29% YoY but an unlucky first week in terms of VIP win rate precluded it.”
According to unofficial sources, the 1 to 21 June average daily Macau GGR (ADR) stood at MOP559 million, with 22 to 30 Jun ADR 12 percent higher at MOP624 million.
“While the latter is welcomed, it is still below the 26-31 May 2015 ADR of MOP662m. This indicates that Galaxy Macau 2 and Broadway Macau (opened on 27 May 2015) have not grown industry GGR yet.”
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