Deutsche Bank On Macau: Near-Term Climate Unlikely To Improve

Carlo Santarelli of Deutsche Bank commented in a note on Thursday that Macau's near-term challenges are unlikely to improve.

Santarelli notes that several persistent tailwinds seen over the past six months have had a negative influence in trends. These include China's anti-corruption campaign, “spotty” real estate trends in key cities that have hampered player sentiment and junket collateral and transit visa restriction implementations.

“Regardless of the local political climate, we see tough sledding ahead for the 1Q15 given difficult comparisons relative to current monthly revenue levels (1Q14 biggest absolute gross gaming revenue quarter in Macau history),” Santarelli wrote. “That said, we think the January NPC (National People's Congress) meeting in Beijing could set the tone for the balance of the year in Macau from a policy standpoint.”

The analyst also expects Fernando Chui, Macau's Chief Executive, to present a five-year plan speech after the National People's Congress meeting but does note that Beijing has taken a “more cautious view” regarding the level of its support towards the gaming industry of late.