Bank Of America: Macau's Sentiment To Remain Weak Following Chinese Presidential Visit
China's President Xi Jinping recently visited Macau for the first time as an official to celebrate the 15-year anniversary of the Macau Special Administrative Region.
Jinping highlighted four points to steer Macau towards the future.
- Enhancing rule of law to promote fair governance
- Pursuing diversified and sustainable economic development
- Advocate patriotic value and social harmony
- An emphasis on “one country, two systems”
According to Billy Ng of Bank of America, Xi's speech is “largely consistent” with the Chinese central government's policies that have already been in place within Macau.
However, the analyst adds that Xi's visit demonstrates the government's willingness to exert greater control over the Macau gaming industry.
Ng notes that Xi's speech demonstrates two long term goals for Macau, which include creating a world tourism and leisure center and becoming a platform between Portuguese-speaking countries and China.
Bottom line, Ng states that “in the short-term, we believe Xi's visit which caused tightening visa and traffic disruption could lead to a further drop in gross gaming revenue this week.
"Medium term, we believe sentiment will only improve after investors have certainty where the new normal will be," they add.
"Ultimately, we believe once the system is cleaned up and reset, the long term growth can be back to a high single digit to low-teens.”
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