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Post by Blitz on Dec 15, 2021 5:01:46 GMT -5
Macau set for 2016-like recovery from 2022: Morgan Stanley by Ben Blaschke Wed 15 Dec 2021 at 04:38 www.asgam.com/index.php/2021/12/15/macau-set-for-2016-like-recovery-from-2022-morgan-stanley/ Investment bank Morgan Stanley has likened uncertainty around Macau’s gaming market and subsequent depression of share prices to the start of January 2016, with the next 12 months likely to resemble the recovery trajectory seen six years ago. In a Tuesday note, Morgan Stanley analysts Praveen Choudhary, Gareth Leung and Thomas Allen noted a number of similarities between now and then, with the current market cap of US$58 billion only just above the US$53 billion seen in January 2016 – to this day the lowest it has been since mid-2011. That 2016 level followed the imposition of Chinese President Xi Jinping’s ant-graft crackdown, which dealt a huge blow to Macau’s previously dominant VIP sector. “GGR growth in 2022 should drive outperformance like 2016,” the analysts said. “Macau stocks’ market cap bottomed in January 2016, roughly 12 months after GGR growth year-on-year bottomed at -50% in early 2015. But by January 2016, GGR growth rate was -20% and it was visible at that time that year-on-year would turn positive sometime in the later part of 2016. This drove a material stock price rebound of 26% year-on-year in 2016. “We see a similar trend in 2022, where year-on-year growth will accelerate even though it’s still at a lower level than 2019. This should drive outperformance in 2022.” Morgan Stanley noted that Macau gaming stocks have been underperforming the Hang Seng Index for the last two years, dragged down by COVID and regulatory overhang, but that the sector has never underperformed the index for more than two consecutive years. Instead, the analysts list a number of key reasons to expect outperformance by gaming stocks, among them license renewal clarity, the new Gaming Law being drafted and the law finally passing the Macau Legislative Assembly. “Each of these events will provide clarity even if the Macau Chief Executive temporarily extends the licenses beyond June 2022, which we expect could be announced by in 1Q22,” they write. They also tip a 41% year-on-year improvement in GGR, which will in turn drive stock price recovery. The analysts name Melco Resorts and Galaxy Entertainment Group as their top picks. |
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Post by Blitz on Dec 15, 2021 5:21:11 GMT -5
Macau recovery to gain traction in mid-2022: Fitch Dec 09, 2021 Newsdesk www.ggrasia.com/macau-recovery-to-gain-traction-in-mid-2022-fitch/Fitch Ratings Inc says it expects Macau’s recovery in gaming tourism to pick up momentum in 2022, “after small-scale virus outbreaks across mainland [China] disrupted an otherwise steady resumption of tourism inflows in the second half of 2021”. The institution said “travel precautions” around the Lunar New Year in early February and the Winter Olympics in Beijing, also scheduled for February, were “likely to result in subdued activity” in the first quarter next year. “But we expect the recovery to gain steam in mid-2022, underpinned by higher vaccination rates and the phased resumption of group tours and e-visa for mainland tourists,” stated the ratings agency. The comments were part of the “Fitch Ratings 2022 Outlook: Greater China” report, published on Wednesday by analysts Andrew Fennell and George Xu. Fitch said the Greater China region would face a “more challenging growth environment in 2022, following robust economic growth during much of 2021.” The ratings agency forecasts economic growth in Macau at 36 percent in 2022, up from an expected 25 percent in 2021, “with the phased resumption of group package tours and e-visas for mainland China residents.” The institution’s outlook on Macau’s ‘AA’ ratings was revised to stable from negative in April 2021, given the city’s “nascent economic recovery and its resilient public and external balance sheets.” According to Fitch, Macau will in the coming year “maintain its explicit Covid-zero policy and prioritise the return of mainland tourists.” A sustained recovery, however, “will hinge on China’s evolving policies towards cross-border travel and gaming, which could be temporarily disrupted by virus outbreaks,” it added. The report also suggested that the “explicit alignment of public health strategies between mainland China, Hong Kong and Macau should permit the normalisation of cross-border business travel and tourism, and boost services trade.” Currently, mainland China is the only place to have a largely quarantine-free travel arrangement with Macau. The city had 6.08-million tourist arrivals for the first ten months of this year, up 32.2 percent on the same period of 2020. The head of the Macao Government Tourism Office, Maria Helena de Senna Fernandes, said in late November that Macau might see in 2022 “10 million” tourist visits, which would amount to a “breakthrough” in the city’s fortunes, and would in likelihood be linked to easing of travel restrictions with Hong Kong and mainland China. In Wednesday’s report, the Fitch team stated that the gaming industry would “continue to be the growth engine” for Macau’s economy, despite its intention to “diversify its economy further through a collaboration with Guangdong province on Hengqin Island.” Nonetheless, Macau’s key credit buffers, such as its fiscal reserve and net external creditor position, “will remain among the strongest globally,” said the Fitch report. |
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Post by Blitz on Dec 15, 2021 5:23:47 GMT -5
ASSOCIATION EXPECTS UP TO 16% ECONOMIC GROWTH NEXT YEAR - TUESDAY, DECEMBER 14, 2021 - macaudailytimes.com.mo/association-expects-up-to-16-economic-growth-next-year.htmlThe city’s gross domestic product (GDP) growth next year will fall between 5% and 16%, estimated Joey Lao Chi Ngai, director-general of the Macau Economic Association, speaking on the sidelines of a forum. Lao explained that the estimate was made based on the results generated by a data model which made calculations in relation to the city’s GDP performance and gross gaming revenue (GGR). Based on the calculations, Lao expects the economy of the city to return to between 50 and 60% of pre-Covid levels, with the GGR likely amounting to between MOP95 billion and MOP140 billion. He stressed that the key factors affecting next year’s economic recovery will still be the developments in the current pandemic and the environments of external economies. For the time being, he is “cautiously optimistic” about the recovery’s trajectory. Lao also commented on the recent closures of VIP casinos and junket operators. Due to this development, he sees the possibility of negative year-on-year growth in economic data for the fourth quarter. Despite the estimate’s range, he said the annual growth could be in double digits, considering the city’s “satisfactory” economic performance in the second and third quarters. Making recommendations to the government, Lao said that the city’s tourism resources should be expanded and that the city should aim for wider sources of tourists. The government should also pick up the pace in constructing the city as a world center for tourism and leisure. The academic says the city should also follow the national policy of “double cycle” and expand the scale at which it attracts investments and entrepreneurs, as well as welcoming talented workers who can take the lead in different trades. In October, the International Monetary Fund (IMF) heavily downgraded its forecast for Macau’s 2021 GDP growth to 20.4%, a drop of 40 percentage points from its April prediction of a 61% rebound. The change in the fund’s forecast follows the city’s wave of Covid-19 infections in October, which led to the closure of government and entertainment venues, a third round of mass testing and a halt on travel due to the Zhuhai authorities’ requirement that individuals arriving from Macau undergo 14 days of quarantine. Although casinos remained open, Macau’s GGR took a hit in October from these impacts. The GGR for the month was just MOP4.37 billion, down 25.8% compared with September. AL/LV |
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Post by Blitz on Dec 15, 2021 5:46:36 GMT -5
Macau stocks to outperform on license clarity, eased travel: MS By AGBrief Editorial - December 14, 2021 agbrief.com/news/macau/14/12/2021/macau-stocks-to-outperform-on-license-clarity-eased-travel-ms/The removal of two overhangs – license renewals and travel restrictions is expected to allow Macau gaming stocks to outperform in 2022, according to analysts from Morgan Stanley. “After two years of material underperformance against Hang Seng Index, we see Macau delivering big outperformance in 2022 similar to what happened in 2016, which was the first year after China’s anti-corruption campaign in 2014-15,” said the analysts. This is driven by clarity on license renewals, which is expected to be achieved within the next six months, including the publication of Gaming Law public consultation results, the drafting of a new Gaming Law, and the passing of it in the Macau Legislative Assembly. Furthermore, withstanding a further crackdown on premium mass similar to that of junket VIPs, the analysts expects 2022 GGR to be up 41 percent year-on-year. “Macau stocks tend to move with GGR growth momentum, and it should drive 2022 outperformance (similar to 2016). Even though EBITDA revisions in 2016 were negative, stocks outperformed.“ This will be driven by an easing of travel restrictions between Mainland, Hong Kong and Macau – which in the near term will at least see the number of daily travelers rise to 20,000 per day. “This should result in Mainland/HK/Macau three-way trip restarting, adding 15-20 percent of 2019 mass revenue. We expect this could happen by end-1Q22/ early-2Q22.” Morgan Stanley expects resumption of IVS visa to Hong Kong in 2Q22, group tours to resume (if vaccinations reach 80 percent) from end 2Q22 and the gradual resumption of the e-visa from 3Q22. |
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Post by birdnest on Dec 15, 2021 7:16:08 GMT -5
There has been so much doom and gloom on this stocks this year that I think it could be a good time to buy? All year has been negative and I’m sure there will be more. I do think think things settle a little and may be a good time to buy more LVS at a good price. The risk may be worth the reward?
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Post by Blitz on Dec 15, 2021 7:34:40 GMT -5
There has been so much doom and gloom on this stocks this year that I think it could be a good time to buy? All year has been negative and I’m sure there will be more. I do think think things settle a little and may be a good time to buy more LVS at a good price. The risk may be worth the reward? I would agree it’s better now than over the previous 2 years. That said, the biggest uncertainty/risk is the terms of concession renewals. While I don't think any current casino owner will lose its concession, the terms could be much more painful for the owners. There will also be less GGR with more competition for it. Both will reduce margins… even before Moa2’s shared prosperity fully kicks in. I’m also guessing Mao2 will turn Macau into a foreigners only gambling enclave and a conventions and MICE area for all… by 2035. By then Hengqin’s new special economic zone will be big enough to absorb Macau’s casino workers displaced by Xi’s mandated diversified economy for Macau. |
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