Macau strikes it big as revenue beats forecasts
Chinese gamers (that's high rollers, not video game players) doubled down on their spending in August. Revenues rose higher than expected, marking the first time in four months that the figures have beaten the Street's expectations. This is great news for investors, and acts as a strong rebuttal to worries voiced by some observers, who suspected gamers were spending less time at the tables than they had in previous months.
In the second half of August, Galaxy Entertainment Group's share price appreciated by 10%!
SOURCE: Yahoo Finance
Macau’s Gaming Inspections and Coordination Bureau revealed on Saturday that receipts in the world’s largest gaming hub grew by 17% (to $3.3 billion) in August from the same month in 2017. This was a clear beat against consensus estimates of a 15% rise.
This is the 25th straight month of growth logged in the region, which is undoubtedly spearheading a wider revival of China’s luxury sector. Still, a number of headwinds have kept investor sentiment from becoming too buoyant: trade wars, economic slowdowns, and scandals in the gaming industry (here’s looking at you, Mr. Wynn) amongst them.
Bloomberg analysts say that Macau’s gross gaming revenue “should grow by about 13% in the third quarter,” underscoring its current trajectory. Most of this positive performance is still coming from the VIP segment of the market, as high rollers continue to outspend their not-quite-as-high-rolling counterparts.
Dominion holds Galaxy Entertainment Group Ltd. in its Global Trends Luxury Fund.
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