Brokerage Goldman Sachs expects Macau’s gross gaming revenue (GGR) to show a gradual recovery in coming months, as the summer peak season approaches with travel policy relaxations.
In a Tuesday update, the analysts cited a series of policy relaxations that could contribute to the recovery, such as the addition of 10 new cities to the Individual Visit Scheme (IVS), multi-entry group tours for Macau-Hengqin, faster visa processing, and the raising of duty-free purchase cap.
The Chinese government recently announced a lifting of the duty-free purchase cap for mainland China tourists to Macau and Hong Kong to RMB15,000, effective from 1 July.
Goldman Sachs believes that this policy change would encourage purchases of more high-value items in Macau, thereby supporting tenant sales at casino operators’ malls during the summer season.
Commenting on Macau’s June GGR of MOP17.7 billion (US$2.2 billion), the analysts attributed the decline to weaker seasonality and win-rate factors.
“To the extent that Macau stocks’ sentiment has been negatively affected by the softer weekly GGR earlier in the month, the inline GGR data ended up reporting for the month of June may be taken positively by the market,” the analysts wrote.
The analysts reiterated Galaxy as their top pick in gaming stocks, highlighting the company’s various initiatives, such as beefing up its marketing team and hosting more concerts/events, which are expected to boost its market share to 20 per cent or above.
