GAMING: Average daily run up 15 pct last week

2014-4-23

From：Macau Business

For the week ending April 21, the average daily run rate in Macau improved to MOP 1.15 billion, up 15% from last week, data provided by Wells Fargo shows.
Macau names are sensitive to the weekly gross gaming revenue (GGR) numbers, which analysts parse to extrapolate how China’s economic slowdown may affect overall demand for gaming.
But the problem is, these weekly numbers are no longer as relevant, as Macau evolves from a VIP gaming destination to an integrated entertainment hub that caters to China’s middle class, according to Barron’s “Emerging Markets Daily”.
“The ‘big fish’ are getting bigger so when they win or lose, the implications on overall win rate become more pronounced,” wrote HSBC in a recent research note, adding that the weekly figures have become more volatile.
For instance, the first two weeks of April had softer readings than usual: Macau generated MOP12.6 billion (USD1.6 billion) in revenue, a 15% fall from March – and that threw analysts and the market off. Nomura Securities forecast a 10-15% year-on-year growth, while Wells Fargo down to 5-10%. Bank of America Merrill Lynch threw in the towel altogether, saying April’s growth rate can be anything between nil to 12%. Yesterday, Nomura Securities tightened its estimate to 12-14% and Wells Fargo raised its estimate to 7-10% y-o-y.
Analysts remark that weekly gross gaming revenue numbers are dominated by performance at the VIP segment, “which is more sensitive to luck and China’s credit growth.” VIP gamblers are no longer Macau’s earnings driver, however. In 2013, the VIP segment contributed to about two-thirds of the total revenue but only about 35% of the gaming profit. This year, the mass market segment continues to grow at a faster pace.
Nomura Securities estimates only about 2% mainland Chinese have visited Macau, whereas about a quarter Americans have been to Las Vegas; and that Macau will double in five years, wrote Bauron’s.

Copyright@Macau Daily Times