Scientific Game

Fitch Ratings upgrades Macau to AA

Wednesday, 14 February 2018 04:26
Share
Visit us

Ratings agency Fitch Ratings has upgraded Macau’s Long-Term Foreign-Currency Issuer Default Rating (IDR) from AA- to AA.

Reflecting on the past 12 months for the Asian gaming hub, Fitch said the upgrade reflects a number of key ratings drivers, including estimated GDP growth of 8.7% in 2017 following three consecutive years of decline.

“The improved growth performance can be attributed largely to a pick-up in gaming activity, though private consumption has also stabilized,” the agency said. “Territory-wide gaming revenues rose by 19% in 2017, after a 3.3% contraction in the year prior.

“Fitch forecasts real GDP growth of 5% in 2018, a view that incorporates a moderation in gaming revenue growth to around 10% and a continuation of ongoing infrastructure initiatives aimed at enhancing the territory’s connectivity and attractiveness as a tourist destination.”

Fitch also estimates that Macau’s fiscal surplus rose to 10% of GDP in 2017, up from 6% a year prior, due to a surge in gaming revenues and continued expenditure restraint. The forecast for 2018 is a surplus of 7.2%, “a view reflective of our more optimistic outlook for gaming revenues this year following a 36% year-on-year increase in January 2018.”

“Fiscal buffers have continued to rise,” Fitch continued.

“Macau is the only Fitch-rated sovereign globally without any outstanding government borrowings, whereas gross general government debt for the AA median grew to an estimated 42% of GDP in 2017. In addition, prudent expenditure management has permitted the accumulation of substantial fiscal buffers. Fitch estimates fiscal reserves were approximately 137% of GDP at end-2017, equivalent to 5.6x the planned 2018 budgetary expenditure.

“A Basic Law requirement that Macao maintain balanced budgets and avoid deficits also provides an important policy anchor to safeguard the territory’s medium-term fiscal sustainability.”

Fitch said it was notable that Macau had maintained fiscal reserves for the past 15 years, even during a decline in gaming revenues between 2014 and 2016. And its balance sheets remain among the strongest of Fitch-rated sovereigns globally.

“The Macau authorities have demonstrated a commitment to fiscal prudence through a period of gaming windfalls and a heavy revenue shock,” it explained. “As a result, the territory’s fiscal and external balance sheets have strengthened to levels that more than offset the significant risks associated with its narrow economic base and concentration on mainland Chinese gaming tourism.”

What's new

Genting Singapore sees 2017 profit soar by 78%

Genting Singapore sees 2017 profit soar by 78% Genting Singapore saw its net profit soar by 78% to SG$685.6 million in 2017, boosted by a revised commission structure for its VIP gaming business and increased visitation at Resorts World Sentosa. Combined revenue for the 12 months to 31 December grew 7% year-on-year to SG$2.39 billion, with gami... Monday, 26 February 2018 06:50

Suncity Group reaches agreement to unfreeze RMB800 million in assets

Suncity Group reaches agreement to unfreeze RMB800 million in assets Macau junket operator Suncity Group Holdings Ltd has announced the release of frozen assets and properties valued at RMB209 million after entering into a settlement agreement in a Shenzhen court. The agreement follows a ruling by the Guangdong Province Shenzhen City Intermediate People’s Court in... Monday, 26 February 2018 06:42

Belle Corporation declares increased cash dividend

Belle Corporation declares increased cash dividend Melco Resorts’ City of Dreams Manila partner Belle Corporation has declared a regular cash dividend of Php0.12 per share for 2017, representing a total dividend payment of Php1.3 billion to shareholders. The dividend is an increase of 26% on the Php0.095 paid out for FY16. The company said the 20... Monday, 26 February 2018 06:40

Macau visitors increase average spend by 23% in 4Q17

Macau visitors increase average spend by 23% in 4Q17                     - Spending by Macau visitors grew 23% year-on-year in 4Q17          - Mainland Chinese visitors spent an average of MOP$2,417          - 47.7% of visitor spend was on shopping          - Total 2017 per-capita spend grew 10.5% to MOP$1,880 Visitors to Ma... Monday, 26 February 2018 06:02

Current Issue

Design For Profit

Design For Profit Architect Paul Steelman provides his insights into designing the most expensive privately funded buildings on earth and making and breaking trends. By Muhammad Cohen | Editor-at-Large EMINENT casino architect Paul Steelman helped create the Asian gaming boom with the groundbreaking design of Sands... Monday, 29 January 2018 15:11

Climbing the mountain

Climbing the mountain   ASX-listed Silver Heritage Group finally launched hotel and casino operations at its new Tiger Palace Resort Bhairahawa in late 2017, having survived the 2015 earthquake, a fuel blockade on the Nepal-India border and an AU$19 million (US$14.4 million) funding shortage as a result of the delays. ... Monday, 29 January 2018 15:07

Can sportsbooks survive a 1% tax on handle?

Can sportsbooks survive a 1% tax on handle?   The big news coming out of the United States this year is the likely striking down of the federal ban on sports betting. But with many states licking their lips in anticipation of added tax dollars, the sports betting industry may well have another crippling fight on its hands. THE US Supreme C... Monday, 29 January 2018 15:05

Herman Ng:Macau Pioneer

Herman Ng:Macau Pioneer Inside Asian Gaming discovers a bit more about Herman Ng, CEO and Executive Director of Macau-based slot machine services firm Asia Pioneer Entertainment (APE). Ben Blaschke: Can you start by telling us a bit about yourself and your background? Herman Ng: I grew up in Macau and then when I was 16 ... Monday, 29 January 2018 14:52