Macau raced to its second highest month on record as gross gambling revenue rose by 5.5 percent compared to the previous year. Gamblers in the Chinese gambling enclave spent a total of MOP26.14billion ($3.27 billion) in August as the strength of the mass market continues to bear fruit for Macau as a whole. The figure, although unquestionably impressive, was less than most analysts expected, as they thought the market would achieve 7-9 percent growth. In terms of what is to blame, the slower than predicted growth and slowdown in the VIP market is again cited.
Michael Ting, an analyst at CIMB Group in Hong Kong, said: “It doesn’t seem to be getting worse, so I think gross gaming revenue growth for the rest of the year will just tread around mid single digits or so.”
By no means is this being labeled a crisis as the fact there is such surprise at modest growth just goes to show how high a regard the enclave’s gambling industry is held.
Forecasters are predicting that Cotai could see 24 percent growth in gross gaming revenue during the second half of 2012. Citigroup analysts told Macau Business that Macau itself will drop off by 2 percent with analyst Anil Daswani showing a clear preference for companies with a sizeable presence in Cotai. Accordingly their top picks were Melco Crown Entertainment, Galaxy Entertainment Group and Sands China.
Macau as a whole is expected to see around 9.8 percent growth in GDP this year with a further rise the following year. The Economist’s Intelligence Unit (EIU) reported that growth in 2013 will rebound back up to 13.5 percent and they came to the figures as a result of investment forecasts. Gross fixed capital formation, a measure of investment, will, according to the EIU, grow 7.4 percent in 2012 before increasing to 10.4 percent in 2013.