Morgan Stanley: Macau GGR on track for a rebound in June
Macau may have found its footing this month after tripping on a lower gross gaming revenue (GGR) in May, according to the latest Morgan Stanley note.
It would be recalled that the city state’s GGR fizzled by as much as 12.1 percent with Macau casinos raking in MOP25.49 billion (US$3.15 billion). In terms of month-on-month comparison, Macau’s May 2018 GGR was lower than the 27.6 percent GGR expansion it posted in April 2018.
The May GGR slowdown was attributed to the fall in mass market numbers, which was partially due to the mid-month mainland police busts of currency exchange shops at the Gongbei border. The market may have also taken a breather after 22 months of growth.
Fortunately, Macau’s GGR weakness in May was only temporary.
Citing a Morgan Stanley report, Asia Gaming Brief reported that Macau’s GGR is on track to grow 20 percent in June due to an improve mass market.
Data from the Macau’s Statistics and Census Service showed that total visitor arrivals for this month were already up 5.2 percent to 2.7 million. The bulk of tourists came from mainland China, which saw an 8.3 percent growth, according to the statistics.
The increase was mainly driven by the opening of Melco Resorts & Entertainment’s Morpheus Hotel and the Dragon Boat festival, according to the brokerage firm.
Morgan Stanley noted that there are more tourists coming from lower-tiered Chinese cities compared with tier-1 Chinese cities, such as Beijing and Shanghai. Data showed that visitors from lower-tiered Chinese cities grew 12.5 percent in June in contrast with the 5.5 percent growth of tier-1 Chinese city visitors during the same month.
The international financial institution believes that the strength of mass market will continue through August.
Morgan Stanley’s view reflects the other sentiments of several industry analysts, who are all betting that Macau casinos will see a mass-market uptick this month. Earlier this month, JP Morgan analysts said Macau gross gaming revenue (GGR) for the first 10 days of June was estimated at around $1.05 billion, translating into about $105.16 million per day. They said that the numbers were better than May’s GGR of $101.7 million per day.
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