No signs of VIP slowdown: Union Gaming

Union Gaming Research Macau opposes the idea of a possible near-term VIP slowdown in Macau’s casinos driven by a speculated cooling demand for luxury goods in the mainland. In an investors note released yesterday, Union Gaming notes that retail sales of gold and jewellery in the mainland increased 45 percent in July 2011, to RMB45 billion (MOP56.6 billion), or roughly inline with the year-to-date average of 49 percent. It also notes that China UnionPay’s Bankcard Consumer Confidence Index “has shown no deterioration over the past few months and is higher than the levels seen late 2010/early 2011.” Finally, Union Gaming also stresses that Hong Kong retail sales levels remain strong, having grown in a range of 26 percent to 28 percent all year (except for February) versus an average of 19 percent in 2010. Last week, Deutsche Bank issued an investors note expressing concern about weakening demand from wealthy Chinese consumers and its potential impact on Macau casinos.