Bangkok--16 Nov--Moody
Moody's Investors Service has raised the outlook of the Asia Pacific gaming sector from negative to stable in its latest outlook on the industry.
"Resumed growth in spending on gaming amid a recovery in regional economies and a more relaxed credit environment, tempered by restrained competition from new supply, support this stable outlook," says Kaven Tsang, a Moody's AVP/Analyst, and author of the report.
"We expect the current stabilizing trend in Asia Pacific's gaming sector to continue as the region's economies recover, led by strong growth in China," adds Tsang.
"Unlike in the US, Asia Pacific's gaming firms have bounced back from an earlier slowdown, with Macau recording three straight months of year-on-year growth in gross gambling receipts from July to September 2009. Meanwhile, in Australia and Malaysia over the past 12 months, revenues and margins have largely been stable," says Clement Chong, a Moody's VP/Senior Analyst, and the co-author of the report.
Specifically, the report notes the following:
In Macau, more friendly gaming policies from the local government, limited near-term supply of new gaming tables, and expectation of no further stringent enforcement by the Chinese government over tourist visitations support stable revenue growth for the sector. The resumed capex plans, as announced by the major operators, are mostly at the initial stages of development, and we do not expect significant new supply to materialize until 2011.
In Australia, gaming receipts grew throughout the worst of the economic downturn from 4Q08 into 2Q09, and we expect the Australian market to be resilient. Neither will an expected rise in unemployment reach levels feared six months ago.
The Malaysian gaming sector is also likely to maintain its resilience, as the economy is set to recover from the current downturn. The sector has also weathered through various economic cycles over the past decade.
Elsewhere, the planned opening of two integrated gaming resorts in Singapore and the recent opening of another in the Philippines should not materially affect the operations of rated operators in the region, says the report.
Chinese visitors and day-tripping high rollers from neighboring Guangdong are the lifeblood to the enclave's gaming sector, but represent only a small proportion of travelers to Singapore. Moreover, Macau's VIP customers have longstanding business relationships with local junket operators, many of whom may not have a presence or ability to operate in Singapore.
Likewise, the new Singaporean resorts should not draw away many customers from Australia and Malaysia which focus on the domestic and mass markets.
The report, entitled, 'Asia Pacific's Gaming Sector: Resilience to Continue,' can be found at www.moodys.com.