Analysts Positive Macau Casino Total Game Earnings Outlook

Japanese financial giant Nomura Holdings expects casinos in Macau to post the smallest year-on-year drop in total monthly gaming revenue since February.

The company announced that it expects Enclave's gambling facility to fall 3% year-over-year in total gaming revenue in August, compared with a 4.5% decline last month of $2.22 billion.

Casinos in Macau posted a 0.1% year-over-year decline in total gaming revenue, even though February was typically a strong trading period due to the Chinese New Year holiday, official figures show.

"In the first seven days of August, average daily gaming revenue excluding slots fell 5.5% to $69.4 million during the week despite a 3.2% lucky VIP win rate compared to 2.85% normal," Nomura Holdings' statement said.
Nomura Holdings said its monthly tally would "decrease from 4% year-over-year to up to 1%" and range from $2.13 billion to $2.22 billion, assuming average daily total gaming revenue excluding slots of $67 million to $70 million for the rest of August.

Hong Kong-based wealth management expert Sanford C Bernstein Limited announced that channel checks showed VIP volume and bulk orders in Macau fell in the first week of August and that "the typhoon Nida is likely to affect the visit from Monday to Wednesday morning."

Typhoon Nida hit the Pearl River Delta last week with strong winds and heavy rain, sending Hong Kong under a storm warning for No. 8, while flights and ferries across the area were also temporarily suspended.
Nonetheless, Sanford C Bernstein Limited expects Macau's total casino total gaming revenue to fall by up to 3% in August, up 3% from the same period in 2015.

The downturn in the Macau casino market began in June 2014, with several investment analysts predicting that the market could soon benefit from the upcoming opening of the Wynn Palace Macau in Wynn Resorts and Sands China Limited's Parisian Macau.

"The Macau market has stabilized in the literal sense and there are continued signs that it is falling at least at a narrow pace," said a statement from analyst Telsey Advisory Group. "So we believe the situation is positive for new properties to open in the coming weeks."

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