Tepid October growth for Macau gaming sector: CIMB

Softening will be caused by higher base values last year.

Here's more from CIMB:

September was the first month with double-digit GGR growth since June though the 12.3% yoy rate was a shade below expectations. We expect October to be a soft month for GGR growth due to high base effects.

Official data released by the DICJ showed that September gross gaming revenue (GGR) reached MOP23.9bn, up 12.3% yoy but down 8.7% mom. YTD GGR is MOP223.3bn, representing 14.9% yoy growth.

The 12.3% growth rate is disappointing as the market was expecting at least 15% growth. Going by the weekly GGR data, growth rates slowed over the course of the month due to a lull in traffic before the Golden Week holidays. Despite being below expectations, September is the first month of double-digit growth in GGR since June.

The strong September was the result of a lower base and the opening of Phase IIA of Sands Cotai Central which added hotel and gaming capacity on Cotai. As October is likely to be a difficult month for GGR growth due to a higher base (two additional Golden Week days in 2011 as opposed to 2012 counting weekends), we are projecting only mid-single digit yoy GGR growth for October.

Based on our channel checks during the Golden Week, both the mass and VIP gaming segments are seeing good foot traffic.

We expect GGR to resume double-digit growth in November/December due to a lower base and continued growth of the mass gaming segment.

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