Mass market in Macau to face uncertainty

According to a note from Morgan Stanley analysts, mass market revenue could face some hurdles in Macau.

Macau.- Brokerage Morgan Stanley has revealed in a note on Tuesday that Macau could face some problems regarding its mass market revenue due to regulatory pressure. Last month, the territory experienced a double digit fall in revenue.

As the brokerage mentioned, mass market growth decreased in June 11 percent year-on-year, compared to the 24 percent reported in May and 16 during the first half of the year. Morgan Stanley believes that recent measures set to ATM machines in Macau, as well as the new requirements that mainland China asked banks to report from overseas transactions worth more than US$150, starting on September, will translate into pressure on mass market revenue, as AGBrief reported.

Stocks from Galaxy and Wynn are also expected to grow higher and faster than the competition during the second wuarter, whilst MGM China and Melco could experience bad results. Earlier this month, it was revealed that VIP sector in Macau is probably unsustainable and too high for what the government is comfortable with. The VIP sector grew 34.8 percent year-on-year during the second quarter. Japanese brokerage Nomura said that investors should proceed with caution since a significantly higher mix of VIP versus mass revenues is an unwelcoming combination.