October GGR headed for 3-5 percent growth: Bernstein

Monday 24th of October 2016

Macau saw its ADR grow to MOP 720 million in the last week, representing a 12.2 percent growth compared to the week before, according to Bernstein in a note on Monday.

According to the brokerage, the increase in ADR is partly due to the visit by the Chinese Premier Li Keqiang in the Oct. 11-16 week, which meant the larger portion of the increase last week was related to VIP volume recovery.

“The increased ADR number has also shown that the typhoon hitting Guangdong Province on Friday had minimum impact on the GGR,” they added.

The results last week puts Macau’s month-to-date gross gaming revenue to MOP 16.6 billion.

“Assuming an ADR of MOP 525-575 million for the remainder of this month, October GGR would be in the range of MOP 20.8 billion and MOP 21.1 billion. This would represent a year-on-year increase of +3 to +5 percent,” noted the analysts.

“Visitation to Macau edged up in September, with total visitation up 0.5 percent to 2.43M. This was driven by a slight increase in total Chinese visitation, up 0.3 percent, which was driven by a 4.7 percent increase in IVS (Individual Visitor Scheme) visitation,” said analysts at Buckingham Research.

Last month, Fitch’s Alex Bumazhny said that the firm is projecting approximately a 5 percent decline in Macau gaming revenue for 2016.

Bumazhny said that recent performance had given the firm a degree of confidence that the market had reached solid footing, but that Macau remained susceptible to macroeconomic and regulatory conditions in mainland China, which must avoid a hard landing as it moves from an investment to a consumer-driven economy. He also pointed to the development of VIP markets outside of Macau, including Saipan, Vladivostok and Philippines, all of which could afford to pay higher junket commissions due to lower tax rates.

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