MACAU BUSINESS


‘confidence’ at junkets,’ they added. A similar perspective was offered by analysts at


Wells Fargo Securities, LLC, who wrote in a March 31 note that the recovery of the city’s gaming industry, especially the VIP segment, ‘could stall once the


Recently, Beijing authorities announced an expansion of the capital’s property curbs, from the housing market to commercial real estate, which restrict individual purchases of commercial properties and suspend personal loans for commercial real estate.


stimulus from loose credit and the Chinese housing bubble wears off’. ‘A key component of our neutral thesis is recent


growth has been driven by Chinese liquidity growth and a housing bubble. We are continuing to see VIP drive growth in the market… In our view, the VIP strength has been partly led by a Chinese real


estate bubble,’ the analysts, led by Cameron McKnight wrote. ‘There has historically been a strong correlation


(85 per cent) between the housing market and VIP volume growth. We expect the increased government restrictions on real estate to at some point cool the market,’ they further explained. Recently, Beijing authorities announced an


expansion of the capital’s property curbs, from the housing market to commercial real estate, which restrict individual purchases of commercial properties and suspend personal loans for commercial real estate. Macau’s gaming revenues have surged since the second half of 2016 with the opening of new resorts helping to draw in high-rollers and more casual gamblers. Chinese President Xi Jinping’s campaign against


shows of wealth by public officials in 2014, had dried up the stream of VIP spenders from the mainland. Analysts remain cautious about the


sustainability of revenues from the VIP market, but have called a bottom to a slump that has afflicted Macau for more than two years. Overseas visitors are an increasingly common sight in Macau, which is trying to diversify an economic model that has depended on mainland high-rollers for more than a decade.


20 MAY 2017


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