The world’s largest casino gambling market just had its best month in three years. On Wednesday morning, Macau reported 22.1 percent gross gaming revenue growth in October, easily topping consensus analyst expectations of 14.5 percent growth.
Macau gaming stocks Melco Resorts & Entertainment Ltd. (MLCO), Wynn Resorts Ltd. (WYNN), Las Vegas Sands Corp. (LVS) and MGM Resorts International (MGM) all rallied on Tuesday following positive Macau commentary from Nomura. That rally continued on Wednesday morning after Macau reported $3.3 billion in revenue, its highest monthly total since October 2014. The strong monthly number was boosted by an uptick in revenue following the Chinese Golden Week holiday the first week of October.
October marks Macau’s 15th consecutive month of year-over-year gross gaming revenue growth after a two-year downturn due to a government corruption crackdown. Macau gaming revenue has now grown at least 16 percent in each of the past nine months.
The impressive growth in the Macau market has been reflected in the share prices of casino stocks this year. All four U.S.-listed stocks are up double digits year-to-date, led by Wynn’s 74 percent gain.
This week’s rally got kicked off on Tuesday by a report from Nomura analyst Harry Curtis.
“Our latest consultant checks point to a noticeable pickup in demand following the 19th Party Congress in China, with VIP and mass revenue up about 30 percent and 9 percent year-over-year, respectively,” Curtis said, according to CNBC.
“Post-Golden Week demand this year has trended much … better than expected.”
Y H & C Investments analyst Yale Bock anticipates smooth sailing for Macau. “It appears the 2018 outlook for gross gaming revenue in Macau is solid,” Bock says. “The opening of a ferry terminal next to Cotai and the Morpheus project should enhance a positive environment after the Communist Party convention. Without travel restrictions, the bigwigs from the mainland seem to love the games of chance.”
Daiwa Capital Markets Hong Kong Ltd. analyst Jamie Soo says…
Click here to continue reading
Want to learn more about how to profit off the stock market? Or maybe you just want to be able to look sophisticated in front of your coworkers when they ask you what you are reading on your Kindle, and you’d prefer to tell them “Oh, I’m just reading a book about stock market analysis,” rather than the usual “Oh, I’m just looking at pics of my ex-girlfriend on Facebook.” For these reasons and more, check out my book, Beating Wall Street with Common Sense. I don’t have a degree in finance; I have a degree in neuroscience. You don’t have to predict what stocks will do if you can predict what traders will do and be one step ahead of them. I made a 400% return in the stock market over five years using only basic principles of psychology and common sense. Beating Wall Street with Common Sense is now available on Amazon, and tradingcommonsense.com is always available on your local internet!
