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Pneumonia will slow Macau gaming growth but not reverse it, analysts say

Pneumonia will slow Macau gaming growth but not reverse it, analysts say

Coronavirus outbreak has hit Macau and will likely slow the city’s gaming growth

Macau.- Analysts remain upbeat about gaming growth despite the first outbreak of Coronavirus Pneumonia in Macau. So long as the government can contain the outbreak there will be no impact in the city’s economy, they have said.

“How the US-listed Macau Gaming stocks perform from here will, in our view, be tied to containment efforts”, Nomura Instinet analysts said in a note.

“The smaller the number of new cases, the less likely it is that investors will be concerned. The inverse also holds true. The impact of pandemics on stocks tends to be at its worst before the WHO issues travel warnings,” the note concluded.

Comparisons to the 2003 SARS outbreak are being made and is partly why there is cause for concern. At that time, visitation to Macau decelerated significantly from +12 percent year-on-year to +3 percent. A similar impact was seen during the 2008 bird flu scare.

However analysts were quick to note that “over a 6-12 month period, visitation was still positive.”

“These are interesting historic perspectives, but the path and intensity of the virus in the near term is unknowable,” they added.

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