Macau operators hinted at significant short-term uncertainty, with some suggesting VIP play in Macau may never fully return, Wells Fargo said in a note.
Operators cited China’s currency devaluation and policy ambiguity along with junket liquidity issues and tighter policy towards Macau from the mainland.
“Following Beijing’s devaluation of the yuan some weeks ago, pundits speculate the [People’s Bank of China] may end support for its currency by December,” Wells Fargo said.
“The move would allow the yuan to depreciate freely and potentially ease pressures on central bank reserves.” Other issues included seasonally-adjusted decline in August revenues reinforcing the view that Macau remains in decline.
“In our view, the market is still in trend decline,” said Wells Fargo.
“Unadjusted mass table revenue declined 30 per cent year-on-year, junket volumes decreased 54 per cent year-on-year, and VIP revenue was down 40 per cent year-on-year. We expect September will see declines of roughly 36 per cent year-on-year, consistent with August.”
Source: Asia Gaming Brief
