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China – Macau’s ATM limits will have ‘virtually no impact on gaming’

By - 13 December 2016

Concerns over new restrictions on daily ATM withdrawal limits have eased in Macau with the government in Beijing detailing less restrictive limits than initially feared.

Cardholders from mainland China will be subjected to withdrawal limit of 5000 patacas ($838) whilst the daily limit on withdrawals of 10,000 yuan ($1890) remains at the same level.

Union Gaming analyst Grant Govertsen believes the new limits are looking to make currency conversions to Hong Kong dollars less attractive by doubling transaction fees.

Mr. Govertsen said:”We steadfastly believe the government (both mainland and Macau) are not targeting the gaming industry.Both governments want to support the ongoing mass market recovery rather than implement policy that might derail it.”

Analysts at JP Morgan in Hong Kong added there would be ‘virtually no impact on gaming demand/fundamentals, and limited overhang on sentiment/stocks.’

Analysts are predicting that Macau’s casinos will post a second successive month of double-digit growth in December.

November saw GGR come in at US$ 2.35bn, marking an increase of a 14.4 per cent.

Analysts at Nomura said: “That might put an end to the series of GGR growth improvements over the past few months, as we saw one per cent, seven per cent, nine per cent, and 14 per cent growth in August, September, October, and November respectively.”

Nomura believes growth could be13 per cent year-on-year in December.
Wells Fargo analyst Cameron McKnight added: “Revenues have benefited from above average VIP hold and that sequential strength is coming from both mass and VIP segment. Our contacts have been suggesting that some junkets are seeing 15 percent to 20 percent growth in volumes.”

Sanford Bernstein Analysts Vitaly Umansky, Zhen Gong and Yang Xie pitch a range of US$2.57bn to $2.63bn.

It gave an average daily rate for the first 11 days of December of MOP686m.

“This would represent a year-on-year increase of +12 per cent to +14 percent,” they said.

Telsey Advisory Group said: “The Macau market has been improving, with particular focus on the sustainability of the recovery in the VIP business.”

It predicts that GGR in December would go up by almost 10 per cent.
Buckinham Research Group meanwhile said: “We are maintaining our fourth quarter GGR outlook, which assumes a 9 percent increase for the quarter, with expectations for mass market GGR to increase in the 11 per cent to 12 per cent.”

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