News INTERNATIONAL UPDATE


Gloom in the boom


Macau records its second-best month ever, but a slow-down in growth in May has analysts hurrying to down-grade


Macau’s casino sector recorded its second most profitable month in May ever although gambling analysts were more concerned with month by month growth which showed its slowest pace since July 2009, sparking concern


Gross Gambling Revenues increased by 7.3 per cent in May reaching US$3.3bn, meeting analysts’ predictions. The biggest worry according to Gabriel Chan, an analyst at Credit Suisse was with the VIP junket sector. “While detailed figures have not been released yet, we believe that the high-roller segment was the most disappointing,” he said. “Our conversations with junket operators suggest they have turned more conservative in credit offering amid near term economic and political uncertainties.


Jon Oh, a New York-based analyst for CLSA Asia- Pacific Markets, had forecast that the growth would be the slowest in three years. He said that the GGR was a ‘denominator problem more than an overall numerator deceleration.’


Aaron Fischer, an analyst at CLSA, said: “Despite the slow growth, May 2012 is actually the second best month on record, only behind 26.8bn patacas in October 2011. We expect gaming revenue growth to recover in June with a lower comparable base of 20.8bn patacas.”


The news of the slow growth broke as casino developer Steve Wynn was announcing that he plans to invest $4bn in the construction of a second Macau resort, his first in Cotai. Mr. Wynn said it was unrealistic for Macau's ‘spectacular’ GGR growth rates to continue at the same pace adding that Macau would still be a ‘wonderful’ place to do business.


Mr. Wynn added that his project, which was approved by government in May, would boast 2,000 hotel rooms, 500 gaming tables, 10 restaurants, shops, spa, meeting rooms and a nightclub on 51 acres of reclaimed swamp land.


July 2012 PAGE 21


“The world is an unsettled place. China happens to


be one of the more stable stories at the moment, but even here in the


People's Republic


of China there are questions about a slowdown and


change. We don’t see it here yet.


Macau is sort of special in that regard.”


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