Malaysian casino industry to see economic rebound in Q4

Vincent Khoo, UOB Kay Hian Malaysia’s head of research, has said that gaming and casino companies will see a substantial recovery in earnings during the last quarter of the year.

Malaysia.- Casino operators can expect to see better results in Q4, according to analysts. Vincent Khoo, UOB Kay Hian Malaysia head of research, has told The Malaysian Reserve that as the pandemic eases, tourism will be the main beneficiary of the upcoming economic reopening. 

He said: “The gaming companies and casino segment is in a sweet spot to capitalise on this post-pandemic leisure boom.”

As for the possible resurgence of Covid-19 cases, he said: “We think that it is unlikely with Malaysia’s stellar vaccination milestone and gradually achieving herd immunity. Authorities have made it clear they intend to restore a semblance of normalcy even without eradicating the virus.”

Regarding other possible challenges the industry could face, he said: “Other challenges would include duty hikes and higher licensing costs from the government.

“However, we also think that the government is unlikely to raise gaming duties or licensing fees on Genting Group as they would logically need to allow the gaming companies to regain sound financial footing, and as an abrupt rise in gaming duties would render Malaysia regionally uncompetitive and backfire on the need to raise revenue.”

Resorts World Genting has been allowed to reopen, and Genting Malaysia Berhad has narrowed its net loss for the second quarter ending June 30, 2021, from a net loss of MYR904.42m in the same period last year to MYR348.11m

Malaysia to reopen borders from January 1

The government of Malaysia has announced it will reopen the country’s borders by January 2022 as part of an economic recovery programme launched amid the easing of Covid-19 countermeasures. Muhyiddin Yassin, former Prime Minister, said the country’s tourism industry went through difficult times during the Covid-19 pandemic and its recovery was slow without foreign visitors.

Despite the announcement, authorities noted there will be control measures and people must show a Covid-19 negative test prior to entering the country. According to Health authorities, 75 per cent of Malaysia’s population has been vaccinated against Covid-19.