Brokerage Sanford C. Bernstein lowered its Macau GGR forecast for the month of June by 1% as the US-China trade war continues.
Macau.- Macau continues to post lower figures month-by-month as the US-China trade war continues. That’s why brokerage Sanford C. Bernstein lowered its forecast for the growth rate of Macau’s gaming gross revenue (GGR) for June by 1%.
The financial firm’s analysts explained that the trade war will endanger the industry’s recovery should it keep going. “Weaker-than-expected macro data for May, along with the recent heightened tension in U.S.-China trade relations however, casts uncertainty over the GGR recovery. If a trade war sustains over an extended period, it will likely pose a headwind to China’s economy and gaming spend from China’s high-net-worth individuals in Macau.”
“In the long run, improvements in transportation infrastructure, the continued growth of the premium consuming class in China and the opening and ramping up of new casino resorts will support long-term growth in mass.”
“VIP volume is estimated to be down mid-single digits of per cent, with lower-than- normalised hold and mass GGR is estimated to be down low single digits per cent month on month,” the firm added.
“We continue to voice caution about the volatility surrounding VIP. Significantly shifting hold rates in VIP creates volatility and lack of ability to more accurately forecast the monthly trend.”
“The devil remains largely in the details regarding the breakdown between VIP and mass, and overall market share data (which is not clearly available) and as such the weight of the overall GGR number needs to be taken with a bit of scepticism, as weekly channel checks have proven to be less than accurate, and volatile.”