Macau casinos enjoy 5.5% surge in revenue
Revenue grows by 5.5 per cent on last year to the second-highest on record for the enclave
Gaming revenue in Macau grew 5.5 per cent last month over the same month last year and was up from July's 1.5 per cent year-on-year growth, which was the slowest pace since the effects of the global financial crisis.
"The 5.5 per cent growth is slightly lower than our expectation of 7 per cent," Richard Huang, an analyst in consumer and gaming research with CLSA, said. "Despite that, August is actually a strong month, with it coming in as the second-biggest month on record."
Revenue for the month was 26.14 billion patacas, according to the city's Gaming Inspection and Co-ordination Bureau. That was the highest for a single month this year and the second-highest ever for Macau, topped only by October last year, when the city reported revenue of 26.85 billion patacas.
In July, business in the casinos in the world's largest gaming enclave was hit by a typhoon that shut down ferry services from Hong Kong and by a slowing mainland economy.
Huang expected growth for last month to continue into this month, although in the long term it may slow down. "Going forward, gaming revenue growth should continue to moderate, given the high base and the weak Chinese economy," he said.
The mainland's gross domestic product grew 7.6 per cent from a year ago in the second quarter, slowing from the 8.1 per cent growth in the first quarter.
A recent note by Credit Suisse expected gaming revenue growth to be between 5 per cent and 10 per cent this month "when the low-based comparisons are likely to kick in".
However, it cautioned that a more significant recovery in growth rate "will only take place after the Chinese government introduces more fiscal stimulus measures".
Huang said the major political power reshuffle set for later this year could also have an impact on the casino industry.
"Some of the people we talk to on the ground are saying that the VIP segment has been affected by the leadership change, which led people to hold back their overseas travel plans," he said.
Shares in Sands China, a unit of the Las Vegas company, rose 2 per cent to HK$27.95 yesterday, while the Hang Seng Index edged up 0.39 per cent. Galaxy Entertainment was up by 0.23 per cent and Wynn Macau gained 1.57 per cent. SJM fell 0.12 per cent.