UPDATE 1-Macau casinos post highest monthly revenue since 2014
Macau stocks have plunged between 10 per cent and 21 per cent over the past month.Devdiscourse News Desk | Updated: 01-11-2018 11:42 IST | Created: 01-11-2018 11:31 IST
The Chinese territory of Macau posted its highest monthly revenue since 2014 in October, bolstered by solid demand from Chinese punters keen to play in the country's only legal casino hub.
Revenue rose 2.6 per cent from a year earlier to 27.3 billion patacas ($3.38 billion) last month, according to Macau's Gaming Inspection and Coordination Bureau.
This was aided in part by a week-long national holiday when most of Macau's hotels operated at close to maximum capacity and visitation jumped 7 per cent on year.
This was the 27th time in a row when monthly revenue rose, although the rate of growth slowed as rising macroeconomic concerns in China dented sentiment in the high-end VIP segment.
Analysts had expected a flat-to-5 per cent growth in revenue.
Casino executives are bullish about the potential benefits from the Hong Kong-Zhuhai-Macau bridge which China opened last month.
The world's longest sea-crossing bridge and tunnel links the financial centre of Hong Kong, the former Portuguese colony of Macau and the Pearl River Delta. It also connects Hong Kong's international airport to the casino hub in just over half an hour.
Authorities hope it will boost the development of Macau's convention and exhibition business and increase overnight visitation numbers, both of which help drive non-gaming revenues.
Beijing has been pushing operators to broaden Macau's economic base to lessen the territory's reliance on the glitzy casinos. Taxes from the casinos currently account for more than 80 per cent of the government's total revenue.
Macau's revenues have bounced back after plunging to a five-year low in 2014 due to slowing economic growth and a widespread crackdown on corruption initiated by China President Xi Jinping.
Meanwhile, the strength of the VIP segment, where players typically bet 1 million yuan at a time, remains uncertain as China's economic growth cools.
The country's economic growth cooled to its weakest quarterly pace since the global financial crisis in July-September, with authorities trying to navigate numerous challenges including the trade war with the United States, a declining yuan and a sell-off in domestic stock markets.
Macau stocks have plunged between 10 per cent and 21 per cent over the past month.
The country's growing middle class remains a bright spot by driving revenues for casino operators which include Sands China and Wynn Macau.
"Even the sceptics would probably agree that Macau's grind/casual-mass segment features some of most attractive structural stories in China's consumer space," said DS Kim, an analyst with J.P Morgan. ($1 = 8.0770 patacas)