Macau Sings a Sweet Song for October, Despite Slowing
Published November 27, 2018 by Lee R
The increase in market dynamics in Macau comes off as encouraging, with only forces beyond its control slowing growth
Island gaming hub Macau reported continuing steady gains for China's gaming mecca.
Gains
The gains reported in the latest figures from Macau's Gaming and Inspection Bureau for Macau totaled 2.6% year-on-year compared capping off at $3.38 billion, the highest total since 2014.
Still Growing
The gain marks the 27th consecutive month of growth for the region, and was seen to have been spurred by a week-long national holiday which filled most hotels.
Strong Start
The month had a robust start due to the arrival of Chinese tourists to Macau for Golden Week at a rate 14% higher than last year.
Slowing
However, the gains have been slowing of late, with the second consecutive month of single digit growth representing a slowdown attributed to the region's casino operators. The 2.6% figure actually fell almost a full point short of the median analyst estimate for growth of 3.5 percent.
The year-on-year figure turned out to be the year's lowest, edging September's 2.8%.
Monthly growth for the year has otherwise fallen between January's maximum of 36.4% and a minimum of 10.3% in July.
Causes of Slowing
This figures are seen as a result of the slowing economy in China and the ongoing trade was between China and the US. Another short disruption was the result of a typhoon that shut casinos for more than a day.
VIP Decreases
The difference between this October and last according to Union Gaming Securities Asia Ltd. analyst Grant Govertsen, is the fact that VIPs this year make up a smaller percentage of gamblers, which is projected to limit the results for traditional holiday months moving forward.
Factors slowing down the VIP market include weakening China property price and stock market turmoil.
Stock Market Reaction
The news caused some paring on the stock market, before Macau casino stocks rallied on the Hong Kong market to the 2.6%, according to Bloomberg intelligence index. Individual gains included
Wynn Macau Ltd. jumping 4.6 percent and MGM China Holdings Ltd. rising 3.8 percent.
Overall Growth
The accumulated gross revenue at Macau casinos reached 251.383 billion patacas (US$31.422 billion), for a 14.3% compared year-on-year increase.
Outlook
With Macau emerging from a the doldrums of a previous crackdown, some ebb and flow is to be expected and accepted as long as the market continues to grow steadily.
