HONG KONG: Macau casino revenue grew for a second straight month in a sign that the world’s largest gaming hub is holding its ground even as a prolonged trade war bites into China’s economic growth.
Gross gaming revenue for Macau casino operators was 23.8 billion patacas (US$3bil) in June, up 5.9% from a year earlier, according to data from the Gaming Inspection & Coordination Bureau. That was better than the median analyst estimate of a 1.8% increase, and follows modest growth in May.Key Insights
An acceleration of growth shows that Macau casinos are weathering the headwinds of the tit-for-tat trade war and a slowing Chinese economy, which have chased away some of the well-heeled gamblers and ended more than two years of uninterrupted revenue growth.
June’s results may help ease investors’ concerns about another trend -- the emergence of rival regional gaming spots in the Asia Pacific region that can lure the VIP segment away.
The effect could be temporary, Andrew Lee, an equity analyst at Jefferies wrote in a June 24 note, with Macau retaining favor given its convenience and easy access for the mainland gamblers.
Expectations remain subdued for the rest of the year as a whole, with analysts foreseeing a 1% median revenue decline.
While the mass market segment has been strong in the past, Citi analyst Anil Daswani wrote in a note last month that some families may have deferred their Macau trips in June due to their children’s school exams.
Casino stocks have been rising, with a Bloomberg Intelligence index of Macau operators climbing 7.5% in June, after a 20% correction in May.
The best performer in June was Melco Resorts & Entertainment Ltd, gaining 13%. — Bloomberg