Sean3810
All eyes are on Macau for the first week of October as the national Golden Week holiday rolls on. Looking back at the prior month, the Macau Gaming Inspection and Coordination Bureau reported on Sunday that gross gaming revenue in the gambling region rose 402.4% year-over-year in September to $14.9B patacas ($1.85B) against a soft comparable to last year when some travel restrictions were in place due to COVID outbreaks in some regions. The consensus estimate was for a GGR gain of around 400% year-over-year. The monthly gross gaming revenue tally was down 13% from the $2.06B level seen in August and came in at about 68% of the pre-COVID level from the same month in 2019. Macau activity during the month was impacted by Typhoon Saola, which led to a short closure of casinos and border traffic.
For the first nine months of 2023, Macau gross gaming revenue was up 305% year-over-year to $128.9B patacas ($16.1B). The outlook for October is very strong, with early indications being that Golden Week traffic will be strong. The gambling mecca is expected to see a daily average of about 120K tourist arrivals in Golden Week and hotel occupancy is expected to be over 90% for the holiday period. Weekend reports on traffic flow at the Zhuhai Highway Port to Hong Kong-Zhuhai-Macau Bridge have been encouraging. JPMorgan analyst DS Kim expects the Macau gross gaming revenue total in October to be the highest monthly tally since the pandemic.
In terms of the broad picture in China, economists think Golden Week has the potential to have a positive spillover effect as in past years of bustling activity and lead to gross domestic product hitting or topping the government’s target of +5% growth for the quarter. “The Golden Week holiday looks like it might be one of the busiest holidays ever and… manufacturing is also beginning to stabilize but I think right now the major focus is still on the property sector,” stated China Citic Bank International Chief Economist Tristan Zhuo to Financial Times.
Macau casino stocks: Wynn Macau (OTCPK:WYNMF, OTCPK:WYNMY), Wynn Resorts (WYNN), Sands China (OTCPK:SCHYY, OTCPK:SCHYF), Las Vegas Sands (NYSE:LVS), MGM China (OTCPK:MCHVF, OTCPK:MCHVY). MGM Resorts (MGM), Galaxy Entertainment (OTCPK:GXYEF), SJM Holdings (OTCPK:SJMHF, OTCPK:SJMHY), Melco Resorts & Entertainment (NASDAQ:MLCO), Studio City International (MSC).
Chine-related ETFs include iShares China Large-Cap ETF (FXI), KraneShares CSI China Internet ETF (KWEB), SPDR S&P China ETF(GXC), iShares MSCI Hong Kong ETF (EWH), KraneShares Bosera MSCI China A 50 Connect Index ETF (KBA), and the Morgan Stanley China A Share Fund(CAF).
