Location, location, location

A potential for cooling in the housing market in Mainland China could signal a drop in revenues for the MSAR, note analysts at Wells Fargo. Recent curbs on the housing market, indicated by a 40 per cent year-on-year slowdown seen in home sales volume data from the Chinese Real Estate Information Corp, quoted by the analysts, could curb speculation.
‘In our view, a stronger housing market is likely driving some of the recent uptick in VIP and premium mass business,’ note the analysts, quoting a 50 per cent year-on-year slowdown in smaller cities, which could dampen revenues in those segments.
Further bringing down revenues in November, which is predicted to see a six per cent to 11 per cent year-on-year increase in gross gaming revenue for the month, is the Macau Grand Prix, which the analysts have typically seen ‘decelerate’ revenues by five per cent on average, due to ‘road closures and time away from gaming’.
The analysts continue to note that they ‘won’t see a v-shaped recovery’ such as in 2013, expecting instead ‘low- to –mid-single-digit growth’.
Analysts also opine that MGM Cotai could open without ‘any’ junkets, however they could be brought in post-opening, calling the group’s third quarter results ‘ahead of expectations’.
In addition, the group notes that the election results, due to China likely preferring ‘a Republican president’ could impact Las Vegas Sands, Wynn and MGM’s operations in the MSAR, however at this point ‘it’s too early to tell’.