Chinese Economy threatens Macau’s growth
The slowing of China’s GDP is set to harm Macau’s gross gaming revenue in the short term, brokerage Sanford C. Bernstein said.
Macau.- The global research team at brokerage Sanford C. Bernstein and Co LLC. has published a report that forecasts Macau gross gaming revenue (GGR) will be harmed by the slowing of the Chinese Economy. According to the analysts, GGR is set to decelerate its growth during the second half of 2018, especially in the fourth quarter, but they remained positive on the overall growth of the industry.
The brokerage’s report indicates that the overheated mainland real estate market and a series of indicators reflecting declining economic performance also impacted in Macau’s GGR performance.
Analysts for Sanford Bernstein further explained that there are threats in the short run to the sustainability of high rates of growth in mass-market GGR, but forecasted an improvement in the long-term. The premium mass segment is also expected to hurt over the threats to mass-market GGR growth over the next 12 months.
The brokerage forecasted the Chinese GDP to grow around an annual rate of 5%, which would enhance consumer spending and turn people wealthy enough to visit Macau. However, it announced that weaker-than-forecast performance by the supporting mainland economy or elements of the economy, changes in Chinese consumer attitude to casino gaming and the amount of action taken in mainland China and Macau to counter corruption may be factors that could harm the gaming industry in the Chinese territory.
