Macau’s Casinos Boast 22 Percent Gains in March, Analysts Bullish
Posted on: April 2, 2018, 02:00h.
Last updated on: April 2, 2018, 01:15h.
Macau’s casino revenues increased by 22 percent in March to $3.21 billion, the biggest upturn in eight months. It’s the 20th consecutive rise for the for the world’s biggest gambling hub, which was thrown into the grips of an economic downturn from 2014 to mid-2016 by an ‘anti-graft’ crackdown spearheaded from Beijing.
![World’s longest sea bridge](https://www.casino.org/news/wp-content/uploads/2018/04/macau.jpg)
The figures come off the back off a 17.8 percent jump in February and beat analysts’ expectations of a 15 percent increase – the median estimate compiled by Bloomberg.
Figures show that Macau’s sustained rebound is being driven not only by a surge in mass market gamblers but also by a resurgent VIP sector, which had been warned off by Beijing’s crackdown.
Casino Stock Soaring
According to the Bloomberg Intelligence index of Macau, the shares in the gambling hub’s casinos increased 11.1 percent on the Hong Kong Stock Exchange in March, significantly outperforming shares in other sectors in the region. The benchmark Hang Seng Index reported a 1.6 percent rise across the board for the month.
While Macau’s two-year slump is now in the past, it serves as a reminder to investors how closely the enclave’s fortunes are tied to the policy whims of Beijing. But for the foreseeable future, things are looking rosy, according to a note by analysts Jamie Soo and Adrian Chan of Daiwa Capital Markets Hong Kong Ltd.
The analysts said there were “limited negative catalysts” in the next three to six months. They added that the long-delayed Pac On Taipa Ferry Terminal, which is expected to open in May 2017, is “potentially the biggest tipping point for a shift in GGR to Cotai.”
Cotai on the Rise
Of the 26.9 million Chinese visitors to Macau last year, just over a third arrived by sea – via the existing Macau Ferry Terminal on the Macau peninsula and a small, temporary Taipai terminal, which will make way for the new Pac On service. The superior new terminal will bring more tourists, and wealthier ones, straight to Cotai, reason the analysts.
“We believe the introduction of … newer/superior gaming products in Cotai, and … a superior transit hub by the sea will attract a material shift of the higher-end VIP and premium mass footfall from Peninsula Macau to Cotai,” said the analysts.
Meanwhile, last week, the Chinese government offered a sneak peak of the world’s longest sea bridge, which will connect Hong Kong to Macau and the Chinese mainland city of Zhuhai. The $15.1 billion, 34-mile-long bridge has taken nine years to build and will cut the journey time from Hong Kong by 60 percent. Although the bridge has no official opening date, it is expected to be operational soon.
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