Macau’s casino gross gaming revenue (GGR) surged by as much as 17.8 percent in February 2017, beating investment analysts’ expectations.
Data from the city’s Gaming Inspection and Coordination Bureau shows that Macau posted a solid MOP22.99 billion (US$2.88 billion) GGR in February – the highest since January 2015, when the aggregate estimate for such revenue was MOP23.84 billion ($2.98 billion).
Macau’s GGR tally over the first two months of the year expanded by 10.6 percent to MOP42.25 billion ($5.28 billion). The positive February data also extends the Macau gaming industry’s recovery to a sixth straight month as the Chinese gambling hub continues its efforts to reinvent itself.
Most analysts, who relied on unofficial industry returns in gauging the GGR, estimated that Macau’s February GGR would be in between 5 percent and 9 percent.
Brokerage Sanford Bernstein attributed Macau’s solid GGR in February to the stellar performance of its VIP market. Analysts Vitaly Umansky, Zhen Gong, and Yang Xie were in agreement that the February data redeemed Macau’s disappointing January figures.
“We believe a large portion of the upside surprise in February (especially the latter part of the month) was strong VIP (strong volumes, somewhat helped by high hold),”the brokerage said in a note it issued on Wednesday. “VIP growth may have likely shown mid-20s-percent growth year-on-year. The last week of the month was helped by several junket marketing events, including SunCity’s anniversary party, which brought in significant increase in VIP players and agents.”
Just recently, international credit debt watcher Fitch Ratings Inc. affirmed Macau’s AA- rating with a stable outlook on the back of improved gaming revenues from newly opened casinos.
Fitch pointed out that their outlook for Macau is “underpinned by the territory’s credible policy framework and exceptionally strong public and external finances, which continue to strengthen despite three consecutive years of economic contraction.”
Alex Bumazhny, Senior Director, U.S. Corporates of Fitch Ratings, said in December that Macau’s economy is steadily recovering from its slump, albeit at a slower pace. The agency sees Macau’s gaming revenues to slide 4 per cent in 2016 before rebounding to mid-single-digit growth in 2017