Market View

An analyst expects at least some honeymoon effect from Mr Chui’s election

Bill Lerner of the consultancy Union Gaming, formerly Managing Director, Senior Gaming & Lodging Analyst at Deutsche Bank in Las Vegas, gave his reaction to the selection of Mr Chui as Macau Chief Executive-elect.

“It is our view that Macau visa restrictions have been easing quietly, which seems more characteristic than a splashy announcement about an official ease that some are anticipating,” said Mr Lerner.

“That said, we do believe Beijing, as a sign of support for the new administration, will ultimately issue a supportive statement about the importance of Macau’s key industry, and ultimately higher frequency visitation will become easier. Since the 10th anniversary of Macau’s handover to China coincides with Chui’s effective date (December 20), this timing seems logical.

“We anticipate additional catalysts in Macau, near-term. These include an implementation of junket commission caps (SJM’s Stanley Ho has organized a meeting of concessionaires/sub-concessionaires this week regarding implementation); the 60th anniversary of PRC establishment (1st October 2009); a macro credit thaw would work its way to Macau helping to shorten junket credit cycles—bolstering working capital and rolling chip volume in turn; further expansion of the Individual Visit Scheme (IVS) to extend to additional provinces; phase two of Gongbei Gate expansion (4Q09), Lotus Bridge gate expansion (Year ending 09 twenty more vehicle lanes), Pac-On ferry terminal additional berths (YE09); Encore Macau, L’Arc, and Oceanus openings; potential HK listings for WYNN and LVS (which could favourably mark-to-market valuations for Galaxy and SJM).”