Morgan Stanley cuts Macau GGR forecast again

Macau’s GGR for the first ten months of 2022 combined stands at MOP35.72bn.
Macau’s GGR for the first ten months of 2022 combined stands at MOP35.72bn.

New cases of Covid-19 in mainland China and Macau have prompted Morgan Stanely to lower its forecast.

Macau.- New Covid-19 cases both in Macau and China have led Morgan Stanley Asia to further cut its predictions for Macau’s gross gaming revenue (GGR) for this year, 2023 and 2024. Analysts have reduced their forecasts by 15 per cent, 13 per cent and 13 per cent respectively, to US$5.6bn, US$16bn and US$26bn.

New Covid-19 cases mean that the resumption of e-visas since November 1 has not offered that boost that was hoped for. Analysts pointed out that since the reopening of the e-visa channel, the online search volumes for “Macao Individual Visit Scheme (IVS)” has not increased, and searches by Guangdong users have dropped significantly.

The investment bank also cut its 2022 forecasts for the Macau gaming company net sales and earnings before interest, taxes, depreciation and amortization (EBITDA) by 7 per cent and 38 per cent respectively. It expects that travel will now not return to normal until well into 2023, depending on the situation in China in the second quarter of next year.

Macau’s GGR for the first ten months of 2022 combined stands at MOP35.72bn, down 50.5 per cent year-on-year. In October, GGR was up 31.6 per cent month-on-month, from MOP2.96bn (US$366.3m) to MOP3.90bn (US$482.3m). It’s the second month of improvement after Macau’s Covid-related shutdown in July.

Macau will continue to follow China’s zero-Covid policy

Ho Iat Seng, Macau’s chief executive, said during his government policy speed for 2023 at the Legislative Assembly that the territory would continue to follow China’s lead. He said that overseas visitors would be welcome to the city, but that authorities must maintain the dynamic zero-Covid policy. He added that he hoped the situation would improve next year.

In October, Liang Wannian, a senior official of the National Health Commission’s Covid-19 response team, suggested that China’s zero Covid-19 policy could continue beyond the first quarter of next year. So far, mainland China is the only place with a basic quarantine-free travel arrangement with Macau.

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