Japanese financial services giant Nomura Holdings is predicting that casinos in Macau are on track to record their smallest monthly year-on-year contraction in gross gaming revenues since February.
The firm announced that it expects the enclave’s gambling establishments to show a 3% decline year-on-year in gross gaming revenues for August, which would be an improvement on last month’s 4.5% drop to $2.22 billion.
Official figures show that February saw Macau’s casinos record a 0.1% deterioration year-on-year in gross gaming revenues although the month is typically a strong trading period due to the Chinese New Year holidays.
“For the first seven days of August, average daily gaming revenues excluding slots was down 5.5% week-on-week to $69.4 million despite a lucky VIP win rate of 3.2% versus a normal of 2.85%,” read a statement from Nomura Holdings.
Assuming average daily gross gaming revenues excluding slots of $67 million to $70 million for the remainder of August, Normura Holdings explained that the monthly tally would be “down 4% to up 1% year-on-year” and hit a range of $2.13 billion to $2.22 billion.
Hong Hong-based asset management specialist Sanford C Bernstein Limited declared that its channel checks had indicated that Macau’s VIP volume and mass segments saw week-on-week decreases for the first week of August with “Typhoon Nida likely having an impact on visitation late Monday through Wednesday morning”.
Typhoon Nida subjected the Pearl River Delta region to gale force winds and heavy rain last week and led to a Number 8 storm warning being issued in Hong Kong while flights and ferry crossings across the region were temporarily suspended.
Despite this, Sanford C Bernstein Limited stated that total August casino gross gaming revenues for Macau are expected to weaken by up to 3%, which would represent an increase of 3% from the same period in 2015.
The slump in Macau’s casino market began in June of 2014 while several investment analysts have predicted that the market could soon benefit from the coming openings of the Wynn Palace Macau from Wynn Resorts and Sands China Limited’s The Parisian Macao.
“Signs continue to suggest that the Macau market has stabilised in the literal sense and is at least declining at a narrowing rate,” read a statement from analyst Telsey Advisory Group. “We believe the context for the opening of new properties in the coming weeks is therefore positive.”